Mobikwik - Are wallets still a thing?

MobiKwik Concall Notes Till Q3 FY26

What I like about management is they and friendly and accept their mistakes. And In Lending Business they are focused on the risk first, growth later. [OPINION]

Focus on chasing profit and growth via frugal innovation. Focus on Tier 2 ,3 and beyond cities. People who are income upto 12 lakh or not paying taxes.

Total User : 186.6 Mil and Merchant: 4.79 Mil

Adding 5 million users / quater. 20 million users/ quater.

And 1 to 1.5 lakh merchant per quater.

Merchant Acquisition Strategy: Selective to good quality and catagoreis in Tier 2,3 and beyond

Customer acquisition cost around 35 rs with up and down of 4-5 rs.

Payment Business

Payment Business Focus: Wallet and UPI Credit Card

Instead of looking at payment take rate look at NPM ( Net Payment Margin) , which will be around 12-15 bps. And EBITDA margin in payment business will be 22-25 %.

NPM = Take Rate - PG Cost - User Incentive

EBITDA = Net Revenue - PG Cost - User Incentive

• Zakpay is very small part of revenue. Admited the mistake of not paying attention

• Merchant Credit Acesss ( MCA ) or Merchant Lon is very small.

In Lending Business

Net TR = Take Rate - DLG Cost - Other Credit Cost

Contribution Margin = 40 %

Net TR - 4 to 5%

• Two types of loan : FLDG and Marketplace. In FLDG they take credit risk ( 3- 5% FLDG ) and collection risk. But in marketplace they don’t take any risk.

• FLDG loans are mostly upto 1 Lakh Rs amount or monthly EMI of 10K. Anything above 1 Lakh Loan are on Marketplace model, because they have more risk and they don’t want to take that risk.

• Small mount 10K, 20K loans can also be on marketplace model, whey they are not satisfied with the user risk profile.

• FLDG Take Rate = Processing Fee + NIM

Upto 7-8 % = Upto 4.5 to 5% + 3.5 %

• Non FLDG = Only Processing Fee ( 2.5 - 3.5 % )

• They can’t put number on Loan growth, because it depends on the lending partner.

• Total loans GMV : 80 % is FLDG and 20 % is non - FLDG

• Lending Focus : adding new partner. Total 10 as of Q3. They also have applied for NBFC license, under process

• Lending Business is linked to the lending cycle. They grow as their partner grow.

• NO Significant monetization from wealth and broking business in near term.

MobiKwik Concall Notes Till Q3 FY26

What I like about management is they and friendly and accept their mistakes. And In Lending Business they are focused on the risk first, growth later. [OPINION]

Focus on chasing profit and growth via frugal innovation. Focus on Tier 2 ,3 and beyond cities. People who are income upto 12 lakh or not paying taxes.

Total User : 186.6 Mil and Merchant: 4.79 Mil

Adding 5 million users / quater. 20 million users/ quater.

And 1 to 1.5 lakh merchant per quater.

Merchant Acquisition Strategy: Selective to good quality and catagoreis in Tier 2,3 and beyond

Customer acquisition cost around 35 rs with up and down of 4-5 rs.

Payment Business

Payment Business Focus: Wallet and UPI Credit Card

Instead of looking at payment take rate look at NPM ( Net Payment Margin) , which will be around 12-15 bps. And EBITDA margin in payment business will be 22-25 %.

NPM = Take Rate - PG Cost - User Incentive

EBITDA = Net Revenue - PG Cost - User Incentive

• Zakpay is very small part of revenue. Admited the mistake of not paying attention

• Merchant Credit Acesss ( MCA ) or Merchant Lon is very small.

In Lending Business

Net TR = Take Rate - DLG Cost - Other Credit Cost

Contribution Margin = 40 %

Net TR - 4 to 5%

• Two types of loan : FLDG and Marketplace. In FLDG they take credit risk ( 3- 5% FLDG ) and collection risk. But in marketplace they don’t take any risk.

• FLDG loans are mostly upto 1 Lakh Rs amount or monthly EMI of 10K. Anything above 1 Lakh Loan are on Marketplace model, because they have more risk and they don’t want to take that risk.

• Small mount 10K, 20K loans can also be on marketplace model, whey they are not satisfied with the user risk profile.

• FLDG Take Rate = Processing Fee + NIM

Upto 7-8 % = Upto 4.5 to 5% + 3.5 %

• Non FLDG = Only Processing Fee ( 2.5 - 3.5 % )

• They can’t put number on Loan growth, because it depends on the lending partner.

• Total loans GMV : 80 % is FLDG and 20 % is non - FLDG

• Lending Focus : adding new partner. Total 10 as of Q3. They also have applied for NBFC license, under process

• Lending Business is linked to the lending cycle. They grow as their partner grow.

• NO Significant monetization from wealth and broking business in near term.

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Some thoughts on Valuation

PhonePe IPO : 10 - 12 x Sales

Paytm : 8 - 10 x Sales

MobiKwik: 1 - 2 x Sales

This valuation gap exists compared to its peers may be because of the market share.

Phonepay 45.5 %, GPay : 33 % , Paytm : 8 % and MobiKwik : 0.3 % By UPI Volume. Which tells you about the active user.

In my view you should not Valuation like paytm, phonepe.

Disc: Invested

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