In a significant blow to its operations, fintech company MobiKwik has revealed that an ex-employee defrauded the company of INR 1.26 Cr by manipulating merchant details. The fraud, which occurred between August 2023 and September 2024, was uncovered and subsequently reported in an official exchange filing. MobiKwik has already provisioned the misappropriated funds in its financial accounts.
The individual behind the fraudulent activity, identified as Gaurav Sharma, altered merchant information to siphon off the sum. MobiKwik has taken swift action by filing a formal complaint with the Gurugram police, and Sharma is currently in police custody.
In response to the incident, MobiKwik has implemented a series of corrective measures to close any security loopholes. These measures include the requirement for Single Sign-On (SSO) logins with VPNs, limiting access to critical admin portals, establishing hourly alerts for changes in sensitive fields like bank details, segregating wallets for different business units, and reversing unused merchant incentive amounts to respective accounts.
This announcement of the fraud coincides with a difficult period for MobiKwik in the stock market. Since its successful IPO debut in December, the company has seen its shares drop by over 40%. The company’s financial performance has also been less than stellar, reporting a loss of INR 55.3 Cr in Q3 FY25, a stark contrast to the INR 5.3 Cr profit it reported during the same period last year. However, its operating revenue grew by 18%, reaching INR 269.47 Cr in the December quarter.
Despite these setbacks, MobiKwik is focusing on diversifying its operations in 2025. Notably, the company recently ventured into the investment tech space by launching MobiKwik Securities Broking, which will deal with stocks, securities, and commodities. It also made a INR 1.5 Cr investment in B2B banking infrastructure company Blostem Fintech, expanding its fixed deposit offerings. Furthermore, MobiKwik’s board has approved plans for future investments in various subsidiaries.
At the end of today’s trading, MobiKwik’s shares rose 2.11% to INR 310.20, signaling cautious optimism amidst ongoing challenges.
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