In the wake of Paytm’s disappointing share market debut, the digital payment firm MobiKwik has delayed its plans to proceed with an initial public offering (IPO) of shares this month.
In an interview with Reuters, Bipin Preet Singh, the CEO and founder at MobiKwik, said the company will go public when it feels that it will hit the successful IPO.
“We received a regulatory nod for launching an IPO in October 2021, and we still have a year to decide on it,” he added.
However, various reports suggest that MobiKwik could delay its IPO by two to three months and could even push it to the next financial year as it struggles to get foreign institutional backers at the right valuation, reported by The Economic Times, citing sources aware of the discussions.
The report added that the fintech firm has been advised to not go ahead with its IPO as it may be hard to find enough demand from domestic institutional investors also.
The Gurugram-based fintech startup had filed its draft papers for a Rs 1,900 crore IPO in July, which was approved by market regulator Securities and Exchange Board of India (Sebi) in October. It was aiming to launch the offering before Diwali day of November 4.
In the meantime, the shares Shares of One97 Communications, the parent firm of Paytm jumps over 9 per cent in today’s trading session. Earlier, One97 Communications shares’ listed at a 9 per cent discount on the bourses on November 18, debuting at Rs 1,955 per share. However, soon after, the shares crashed 27 per cent against the issue price of Rs 2,150 and hit an intra-day low of Rs 1,564 apiece.
Meanwhile, bankers and analysts had warned that Paytm's dismal showing would put a damper on future offerings after the mega IPO ranked among the worst-performing in Indian history. Some suggested MobiKwik - a direct rival to Paytm in India's ultra-competitive payments space - would be among the first to see its IPO prospects impacted.
Macquarie Capital Securities (India) Pvt., which was vindicated on its initial downbeat call on Paytm, maintained its bleak view on profitability Monday after Paytm released financial details for the critical period ahead of the Diwali holiday.
Paytm's price-to-sales valuation remains expensive and “profitability should remain elusive for a long time,” the brokerage said in a note.