One Mobikwik

Risks

• The company operations are subject to regulation, oversight and inspection by the RBI, and any adverse observations, proceedings or notices from the RBI may affect its operations.

• The company funding requirements and proposed deployment of the Net Proceeds are based primarily on management estimates and assumptions and have not been appraised by any bank or financial institution or any other independent agency. The utilisation of the Net Proceeds may be subject to change based on various factors, some of which are beyond its control and such utilisation may not generate expected future revenues or profits after utilisation. Further, any change or variation in the utilisation of Net Proceeds from the terms and conditions stated in this Red Herring Prospectus shall be subject to compliance requirements, including among other things, prior Shareholders` approval.

• Security breaches and attacks against its platform, and any potential breach of or failures to otherwise protect personal, confidential and proprietary information, could damage the company reputation and materially and adversely affect its business, financial condition and results of operations.

• Its may not be able to maintain the levels of growth, including in its Financial Services business, and the company historical performance may not be indicative of its future growth or financial results, which could adversely affect the company`s business, results of operations and financial condition.

• If the company is unable to retain or expand its network of consumers, merchants, or Lending Partners, or in the event of low growth or decline in the number of its registered users and declining revenues in the company digital payments and financial services businesses, its business, results of operations, financial condition, and future prospects would be materially and adversely affected.

• The company faces substantial and increasingly intense competition in the fintech industry. If its unable to compete effectively, the company`s business, financial condition, results of operations and prospects would be materially and adversely affected.

• Its distribution of Financial Services Products depend on the company relationships with Lending Partners, and any failures to maintain such partnerships could adversely affect its business, results of operations and financial condition.

• Its credit underwriting and risk management systems may not be able to effectively assess or mitigate the risks of Financial Services business enabled through our platform, and as a result, its Lending Partners may be unable to effectively recover the amounts disbursed by them to the company`s customers, which could adversely affect its business, results of operations and financial condition.

• Its Statutory Auditors had, included a qualification in relation to certain allotments of preference shares in their audit report on its financial statements as of and for the year ended March 31, 2021. Further, the company Statutory Auditors have, in their audit report on its consolidated financial statements, as of and for the years ended March 31, 2023 and March 31, 2024, included a modification in connection with back-ups of books of accounts of the Company. There can be no assurance that similar qualifications or modifications will not form part of the audit reports on its financial statements for future fiscal periods.

• The company has in the past, incurred losses amounting to (1,281.62) million and (838.14) million in Fiscals 2022 and 2023, respectively. Further, while the company achieved profit of 140.79 million in Fiscal 2024 its further incurred losses of (66.15) million in the three months ended June 30, 2024. Further, the company has negative balance of retained earnings as of March 31, 2022, March 31, 2023, March 31, 2024 and the three months ended June 30, 2024. Accordingly, its may not always achieve or sustain its profitability trends in the future.

• There have been certain deficiencies/ irregularities in managing its records and compliances with the RBI in relation to allotments made by us to certain non-resident Shareholders, as a result of which there have been certain inaccuracies and non-compliances with respect to certain filings with the RBI.

• Inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for its business operations could materially and adversely affect the company`s business, prospects, results of operations and financial condition.

• Business interruptions or systems failures may impair the availability of its platform and inability to keep pace with rapid technological developments to provide new and innovative products and services, could result in a decline in the use of its products and services which may adversely affect the company`s business, financial condition and results of operations.

• Slowdown in the growth of its Active Users can adversely affect the company`s business.

• Any failures to comply with applicable laws and regulations, including regarding consumer data processing, storage, use, security, disclosure and privacy, could result in claims, changes to its data security and privacy practices or the company other business activities, penalties, increased cost of operations, or decline in consumer growth or engagement, or otherwise negatively affect its business.

• The company relies on card issuers, banks and/ or payment processors. Changes to payment card networks or bank fees, rules, or practices could reduce its operating income and failures to comply with the applicable requirements of payment processors could result in termination or suspension, which could have a material adverse affect its business, financial condition and results of operations.

• Its EPS and RoNW was negative for Fiscals 2022, 2023 and the three months ended June 30, 2024 on account of losses incurred in the respective years/ period. While the company had positive EPS and RoNW for the financial year ended March 31, 2024, its may not always maintain or sustain such positive ratios in the future.

• The company depends on Zaakpay`s services for its payments services and Financial Services business, specifically, MobiKwik ZIP and ZIP EMI, and any disruption in its services may adversely affect the operations of platform, which could have an adverse effect on its brand, reputation, business operations, financial condition and results of operations.

• The company is required to comply with certain restrictive covenants under its financing agreements. Any non-compliance may lead to, amongst others, suspension of further drawdowns, which may adversely affect its business, results of operations, financial condition and cash flows.

• After the completion of the Issue, its Promoters will continue to collectively hold substantial shareholding in the Company.

• Failures to deal effectively with fraudulent transactions, illegal activities creates negative consumer experiences, that would harm its business, and could severely diminish merchant and consumer confidence in and use of the company platform.

• The company`s financial services business is significantly dependent on its MobiKwik ZIP and ZIP EMI products. If these products does not continue to scale, or experience a downturn, or if the company is not able to launch new products in the Financial Services business, its revenues, profits and results of operation may be adversely affected.

• The company product Xtra, may be susceptible to certain credit, liquidity and reputational risks and risks associated with changing regulations, exacerbated by the fact that the company has distribution arrangement only one partner.

• There are outstanding litigation proceedings against the Company and one of its Subsidiaries, Zaak ePayment Services Private Limited. Any adverse outcome in such proceedings may have an adverse impact on its reputation, business, financial condition, results of operations and cash flows.

• Certain of its corporate filings with the RoC have discrepancies. The company cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and the company will not be subject to any penalty imposed by the competent regulatory authority in this regard.

• The company is unable to trace some of its historical corporate and secretarial records. The company cannot assure you that no legal proceedings or regulatory actions will be initiated against the Company in the future in relation to the missing corporate records.

• Its may be impacted by a rise in cost of capital, which could decrease the attractiveness of its Digital Credit and increase in the interest rates may decrease the attractiveness of Xtra, distributed through the company platform.

• Collection efforts in its Digital Credit Distribution offerings may be ineffective or deemed improper. Borrowers also may not view or treat their Digital Credit distributed through it as having the same significance as other obligations, and the Digital Credit facilitated through its platform are not secured, guaranteed, or insured and involve a high degree of financial risk.

• The company has had negative cash flows from operating activities in the past and may, in the future, experience similar negative cash flows.

• The company has, in two instances in the past, allotted securities in lieu of accrued payables due by the Company in the past. Any future discharge of payables by the Company through equity securities may dilute its Shareholders and adversely impact its trading price.

• Any failures to maintain, protect and enhance the company brand and reputation could have a material adverse effect on its business, financial condition and results of operations.

• The company depends on internet search engines, mobile operating systems and application marketplaces to drive traffic and make its platform available to consumers and merchants. If the company does not effectively operate with or receive favourable placements within such engines and operating systems its business, financial results, cash flows and results of operations could be adversely affected.

• The company relies on third parties to provide reliable and satisfactory products and services, and any disruption of or interference of the services provided by such third parties could adversely affect its business, financial condition, cash flows and results of operations.

• Its investments in sales and marketing may fails to drive attention to its platform and may not result in additional transactions completed through the company platform.

• The company is dependent on its Promoters, a number of Key Managerial Personnel and Senior Management and its inability to attract or retain such persons or finding equally skilled personnel could adversely affect the company`s business, results of operations, cash flows and financial condition.

• Its may be unable to successfully protect the company intellectual property rights from being infringed by others, including competitors.

• Any failures to offer quality support and maintain high level of consumer satisfaction may harm its relationships with the company consumers, Lending Partners and merchants and could adversely affect its business, financial condition, cash flows and results of operations.

• If the company is unable to cross-sell its Investments and Insurance products, the company`s ability to generate additional revenue from consumers could be negatively impacted, which would adversely affect its business, financial condition and results of operations.

• The company has in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to its operations and financial performance that may vary from any standard methodology that is applicable across the fintech industry. The company relies on certain assumptions and estimates to calculate such measures, therefore such measures may not be comparable with financial, operational or industry related statistical information of similar nomenclature computed and presented by other similar companies.

• The company has not obtained credit ratings and may not be able to access capital to finance its operations and future growth of the company`s business, which could have a material adverse effect on its business, results of operations, financial condition, cash flows, and future prospects.

• Acquisitions, strategic investments, and other strategic transactions could result in operating difficulties and could harm its business.

• Any failures by it or the company`s partners who work with its in connection with its digital payment and finance services to comply with applicable Anti-Money Laundering ("AML"), counter-terrorist financing and economic sanction laws and regulations could lead to significant penalties and damages to its reputation.

• Changes in how consumers fund their MobiKwik Wallet could negatively impact its business, financial condition and results of operations.

• The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

• Its insurance coverage could prove inadequate to satisfy potential claims or protect it from potential operational hazards and losses which may have a material adverse effect on its financial condition, results of operations and cash flows.

• Its Promoters and certain of the company Directors, Key Managerial Personnel and Senior Management have interests in the Company other than their normal remuneration or benefits and reimbursement of expenses.

• The company offices are located on leased premises and there can be no assurance that these leases will be renewed upon termination or that its will be able to obtain other premises on lease on same or similar commercial terms.

• The company has certain contingent liabilities that have not been provided for in its financial statements, which if they materialise, may adversely affect the company financial condition.

• Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned and paid for by it as well as exclusively prepared for the purposes of the Issue. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

• The company`s ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.