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Business News » Companies News

After Axis Bank acquires Freecharge, Bajaj Finance buys stake in MobiKwik for Rs 225 crore

Just a few days after Axis Bank acquired Freecharge, now NBFC Bajaj Finance has brought nearly 11% stake in another digital wallet company MobiKwik. 

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After Axis Bank acquires Freecharge, Bajaj Finance buys stake in MobiKwik for Rs 225 crore
(From Left) Bipin Preet Singh, CEO, Mobikwik with Co-founder of MobiKwik, Upasana Taku at a MobiKwik conference. Photo: MobiKwik
Written By: ZeeBiz WebTeam
Updated: Thu, Aug 03, 2017
02:05 pm
Mumbai, ZeeBiz WebDesk
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Key highlights:
  • Bajaj Finance acquires nearly 11% stake in MobiKwik for Rs 225 crore
  • Bajaj Finance would hold approximately 10.38% of equity in MobiKwik
  • MobiKwik in talks with investors to raise another $70 million on top of this deal

Bajaj Finance Ltd announced on Wednesday that it has brought nearly 11% stake in digital payments company MobiKwik for Rs 225 crore. The company has entered into an agreement with MobiKwik for the an acquisition of 10 equity shares and 2,71,050 compulsory convertible preference shares (CCPS).

Post the conversion of CCPS, Bajaj Finance would hold approximately 10.38% of equity in MobiKwik on a fully diluted basis. Bajaj Finance has also entered into a Shareholders Agreement which would become effective on the conclusion of the above investment transaction.

MobiKwik also announced that the strategic tie-up with Bajaj Finance would entail the launch of a debit and credit wallet. This will mean that MobiKwik will be able to give its consumers credit facility through the wallet.

Besides this, MobiKwik is also in talks with investors to raise about $70 million (about Rs 445 crore) on top of the Rs 225 crore raised from Bajaj Finance today, said Co-founder of MobiKwik, Upasana Taku in a Bloomberg report.

Taku further said that MobiKwik expects to break even by December 2019 and the company's valuation has more than doubled from previous funding rounds.

She said that the tie-up with Bajaj Finance will offer brick-and-mortar store presence to MobiKwik across the country.

Rajeev Jain, Managing Director, Bajaj Finance Limited said, “We aim to combine the synergies of both the organisations - deep rooted customer analytics and extreme focus on digital-oriented eco-system will make this a disruptive proposition amongst our existing products. Bringing in debit and credit option in one app will facilitate stronger customer convenience, stimulating higher spends.”

Bipin Preet Singh, CEO, Mobikwik, said, “Our partnership with BFL will enable us to realise our vision of performing all the functions of bank yet retain our core competency of being India’s leading e-wallet and we strongly believe that this combined value proposition will attract millions of new customers to choose wallet led mobile banking transactions. In short Mobikwik transforms itself as a new-age bank where our digital transactions will lead to lowering of lending rates and increased supply of money in the Indian economy”.

This is the second such deal where traditional financial institutions such as banks and NBFCs have been taking stake in digital wallet companies. Just last week Axis Bank acquired Freecharge for Rs 385 crore from Snapdeal.
ALSO READ:
  • Axis Bank acquires Accelyst and Freecharge for Rs 385 crore
  • Here's how Freecharge acquisition will bolster Axis Bank's digital arm
  • Mobile wallet firms FreeCharge, MobiKwik in talks regarding merger

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TAGS:
MobikwikBajaj FinanceAxis BankFreechargeacquisitiondigital paymentsSharescredit facilitydigital walletBanking & Financial ServicesStartups
RELATED NEWS
Bajaj Finance takes stake in mobile payments company MobiKwik Bajaj Finance takes stake in mobile payments company MobiKwik
MobiKwik partners Samsung Pay for select devices MobiKwik partners Samsung Pay for select devices
Flipkart stands to gain from the alleged FreeCharge, MobiKwik merger Flipkart stands to gain from the alleged FreeCharge, MobiKwik merger
Mobile wallet firms FreeCharge, MobiKwik in talks regarding merger Mobile wallet firms FreeCharge, MobiKwik in talks regarding merger
State-backed rivals force India's e-payment firms like Paytm, MobiKwik, FreeCharge, others to step up State-backed rivals force India's e-payment firms like Paytm, MobiKwik, FreeCharge, others to step up

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