MobiKwik Reports Loss of INR 1.3Cr as a Result of Fraud

A former employee of the fintech business MobiKwik allegedly altered merchant details to cheat the company out of INR 1.26 Cr. The company said in an exchange filing that Gaurav Sharma, the former employee, diverted the money from its books between August 2023 and September 2024. The company's book of accounts has been adjusted to reflect the amount that was stolen. According to MobiKwik, the individual in question is presently being held after the company filed a case with the Gurugram police. MobiKwik has put in place a number of corrective actions to close the gaps. These include creating distinct wallets for various business segments, limiting access to admin portals, requiring a VPN for SSO (single sign-on) login, reversing unused merchant incentive amounts to their respective wallets, and sending hourly alerts to authorised individuals for changes in sensitive fields, such as bank account details.

MobiKwik Going Through Slew of Challenges

The company has already been going through a difficult period on the stock exchanges when it was informed of the scam. The company's shadInvestors were especially optimistic before the IPO because of MobiKwik's demonstrated profitability over the course of a full fiscal year. But since then, the fintech's financial performance has suffered. In fact, in the two quarters since going public, it has posted losses.

According to MobiKwik's most recent financial declaration, the company lost INR 55.3 Cr in Q3 FY25, against a profit of INR 5.3 Cr in the same period last year. However, operating revenue increased by 18% year-over-year to INR 269.47 Cr in the December quarter, up from INR 228.93 Cr in Q3 FY24. Since then, the business has been attempting to strengthen its operations by venturing into unexplored areas.

Ongoing Developments at MobiKwik

By establishing a fully owned subsidiary, MobiKwik Securities Broking, the company has made its foray into the investing tech sector. This means that it will deal in commodities, currencies, debt instruments, shares, stocks, and securities, as well as their derivatives. It expanded its fixed deposit (FD) aggregation as its primary service in February by purchasing a share in Blostem Fintech, a B2B banking infrastructure firm, for INR 1.5 Cr. Going forward, the board of the corporation authorised an undisclosed investment in "one or more" subsidiaries.

Google Pay, Paytm, and PhonePe are competitors of Mobikwik, which was founded in 2009 by Bipin Preet Singh and Upasana Taku. In addition to other financial products, it provides buy-now-pay-later (BNPL) services and mobile wallets. On December 18, 2024, Mobikwik debuted on the stock market, with shares trading at INR 442.25.