MobiKwik shifts LSP business to subsidiary for Rs 14.7108 crore

One MobiKwik Systems Limited transferred its lending service provider (LSP) undertaking to its wholly owned subsidiary, MobiKwik Distribution Services Private Limited (MDSPL), for Rs 14.7108 crore in non-convertible debentures (NCDs). The slump sale took effect on 18 August 2026, after the undertaking reported Rs 18.846 crore profit for the half year ended 30 September 2026.

Why did MobiKwik transfer its LSP business?

MobiKwik did not state a commercial rationale for the transfer, but it said the LSP undertaking was moved to MDSPL under a Business Transfer Agreement dated 22 May 2026, effective 18 August 2026. MDSPL was formerly known as MobiKwik Credit Private Limited and is a wholly owned subsidiary of MobiKwik.

MobiKwik described the transaction as a going-concern slump sale under applicable provisions of the Income-tax Act, 1961. The company classified the LSP business as a discontinued operation under Indian Accounting Standard (Ind AS) 105, Non-current Assets Held for Sale and Discontinued Operations, until the actual transfer date of 18 August 2026.

The transfer followed a change in the planned use of initial public offering (IPO) proceeds approved through a postal ballot whose results were declared on 2 July 2026. MobiKwik reallocated Rs 60.85 crore to an equity investment in MDSPL so that the subsidiary could operate as an LSP, and said this amount was fully utilised by 30 September 2026.

What did MobiKwik receive for the LSP undertaking?

MobiKwik received Rs 14.7108 crore as consideration for the undertaking, fully discharged by MDSPL through the issuance of NCDs to MobiKwik. The filing states that the transfer was effective on 18 August 2026 and does not disclose the NCD interest rate, maturity, security or repayment terms.

The Rs 14.7108 crore NCD consideration is separate from the Rs 60.85 crore equity investment in MDSPL disclosed under the revised IPO-object allocation. The former relates to the business transfer, while the latter was allocated for MDSPL to operate as an LSP.

MobiKwik's standalone investments stood at Rs 292.342 crore at 30 September 2026, compared with Rs 82.685 crore at 31 March 2026. Its standalone cash-flow statement recorded Rs 61.833 crore of investment in subsidiaries in the half year ended 30 September 2026, against Rs 2.01 crore in the corresponding prior-year half; the filing does not reconcile either figure separately to the NCD consideration.

How profitable was MobiKwik's transferred LSP business?

MobiKwik's transferred LSP business reported profit before tax and after tax of Rs 18.846 crore for the half year ended 30 September 2026, compared with a loss of Rs 29.125 crore in the half year ended 30 September 2025. No tax expense was reported for the discontinued operation in either half-year period.

Revenue from operations increased to Rs 12.044 crore in the latest half year from Rs 11.948 crore a year earlier, while total expenses declined to Rs 10.1785 crore from Rs 14.9403 crore. Total income rose to Rs 12.2589 crore from Rs 12.1837 crore over the same comparison.

Earnings before finance cost, depreciation, amortisation and tax (EBITDA) were Rs 2.0804 crore, against an EBITDA loss of Rs 2.7566 crore in the prior-year half. Finance costs fell to Rs 14.6 lakh from Rs 21.9 lakh, while depreciation and amortisation increased to Rs 1.812 crore from Rs 1.34 crore; the disclosed results cover the discontinued operation only until 18 August 2026.

How did MobiKwik's LSP business perform by quarter?

MobiKwik reported Rs 4.7721 crore of LSP revenue from operations for the quarter ended 30 September 2026, compared with Rs 7.2719 crore in the quarter ended 30 June 2026 and Rs 6.1229 crore in the quarter ended 30 September 2025. The company said the discontinued-operation results were reported only until the actual transfer date of 18 August 2026.

Profit before tax was Rs 93.73 lakh for the quarter ended 30 September 2026, compared with Rs 94.73 lakh in the June 2026 quarter and a loss of Rs 57.27 lakh in the September 2025 quarter. Other income was Rs 73.3 lakh in the latest quarter, against Rs 1.416 crore in the preceding quarter and Rs 1.302 crore a year earlier.

Total expenses were Rs 3.8214 crore in the September 2026 quarter, down from Rs 6.3571 crore in the June 2026 quarter and Rs 6.7426 crore in the September 2025 quarter. EBITDA was Rs 1.024 crore in the latest quarter, compared with Rs 1.0564 crore in June 2026 and an EBITDA loss of Rs 48.95 lakh a year earlier; MobiKwik did not provide an operating explanation for the changes.

What changed in MobiKwik's standalone reporting?

MobiKwik presented the LSP undertaking separately as a discontinued operation under Ind AS 105 until 18 August 2026. This presentation separates the undertaking's revenue, expenses and profit from continuing operations in the standalone results for the quarter and half year ended 30 September 2026.

The standalone cash-flow statement showed profit before tax from continuing operations of Rs 4.083 crore and from discontinued operations of Rs 18.846 crore for the half year ended 30 September 2026. In the corresponding half-year of 2025, MobiKwik reported a continuing-operations loss before tax of Rs 37.686 crore and a discontinued-operations loss before tax of Rs 29.125 crore.

At 30 September 2026, MobiKwik's standalone borrowings were Rs 351.201 crore, compared with Rs 266.568 crore at 31 March 2026. Cash and cash equivalents were Rs 252.019 crore at 30 September 2026, against Rs 231.98 crore six months earlier; the filing reports these balances separately from the transfer and does not specify their relationship to the NCD settlement.

Conclusion

MobiKwik moved its LSP undertaking into MDSPL through a Rs 14.7108 crore NCD settlement effective 18 August 2026. The transfer changed the standalone presentation of the operation to discontinued operations through that date, while the business recorded Rs 18.846 crore profit in the half year ended 30 September 2026, versus a Rs 29.125 crore loss a year earlier.

The next disclosed milestone is the use of Rs 49.012 crore of unutilised IPO proceeds at 30 September 2026. MobiKwik said the timelines for revised Objects 1 and 3 were extended to 31 March 2027, while the filing leaves the terms of the NCDs issued by MDSPL undisclosed.