Fintech Giant MobiKwik Rewards Employees On Heading Into The IPO
Leading Indian mobile wallet and Buy Now Pay Later (BNPL) platform, MobiKwik, as per its Draft Red Herring Prospectus (DRHP) filed on 12th July 2021, should provide a bountiful reward to its employees through the ESOPs issued, on listing.
Employee Stock Option Plans (ESOP) give an organization’s employees ownership in the company in the form of stock options. The company has used ESOPs as an additional incentive to attract, retain and reward deserving employees in a competitive talent market.
The company under its ESOP 2014 Scheme, has reserved 4.5 million equity shares, for creating a pool of ESOPs for the benefit of the eligible employees. The number of equity shares that would arise from the full exercise of options granted implies 7% of the fully diluted outstanding shares; c20% of these grants have occurred around the filing of the DRHP. This 7% compares to less than 2% holding for most other internet companies that are coming up for listing.
MobiKwik last raised a Series G round of US$20 million from Abu Dhabi Investment Authority (ADIA) at a per-share value of INR895.80 per share. This implies a 600% gain on average for the employees on their ESOPs (even at the last round price).
This 6-fold increase in the ESOPs’ value has created generational wealth for the employees. It is the result of both the trust shown by employees in the company’s vision and the partnership-like approach taken by the Company in sharing the rewards of value generation over time with the employees.
At the latest series G funding round valuation of US$720 million, 7 employees are worth more than INR100 million, and 31 are worth more than INR10 million each. More importantly, 118 current employees (almost 1/4th of the overall employee base) have become rupee millionaires, highlighting the company’s philosophy of ensuring equitable participation as opposed to just focusing on the leadership team. The cumulative wealth creation for the employees currently stands at INR3 billion.
Commenting on the announcement, Upasana Taku, Chairperson, Co-founder & COO, MobiKwik said, “Over the last decade, MobiKwik has grown on the strength of its employees to become a leading fintech player in India. As we cement our presence and leadership further, we wanted to acknowledge and reward our employees for their efforts. Together we march in our pursuit of building the most inclusive digital payments and credit experience for Bharat while generating value for all.”
The Gurgaon-based company has become the first Indian fintech company to file its DRHP with SEBI. MobiKwik plans to offer shares aggregating to INR 19,000 million in its IPO of which INR15,000 million is a Fresh Issue while the remaining INR4,000 million is an Offer for Sale by Existing Shareholders.
