money-on-mobile

Mobile payment service provider My Mobile Payments Ltd (MMPL) which operates the mobile money service Money On Mobile, has been directed by the Foreign Investment Promotion Board (FIPB) to raise Rs 58.91 crore (around $9.46 million) through the automatic route.

The company had previously applied for FIPB’s approval in the first week of August 2013 to directly raise funding from Caplain Inc. MMPL managing director Shashank Joshi had told Medianama that they were planning to raise a total $50 million investment from Calpian, of which they will receive $10 million now and the remaining $40 million in the first quarter next year.

Joshi had said FIPB’s approval was necessary for this investment, since MMPL manages consumer funds and is therefore licensed and regulated by the Reserve Bank of India (RBI). Last month, Money on Mobile had introduced direct bill payment integration with five Indian utility providers including Bihar Electricity Bill Payment, Reliance Energy Bill Payment, BEST Electricity Bill Payment, Mahanagar Gas Limited and Tikona Bill Payment. It had also received a five year authorization renewal from RBI last month.

DPPL Investment: Remember that Calpian had previously invested in MMPL, by investing in a newly formed company DPPL (Digital Payments Processing Limited), which in turn had entered into a service agreement with MMPL in April 2012. The company had then committed a $9.7 million cash investment and 6.1 million shares (6,123,077 shares) in common stock, which had increased to $10.8 million cash and 6.1 million shares earlier this year (More on the funding structure here). Joshi however had mentioned that this was a separate investment altogether.

As of September 30, 2013, Calpian has invested $8.7 million into DPPL, issued 3.7 million shares of its stock valued at $5.5 million and recognized a cumulative $3.6 million equity investment and currency translation losses in return for 65% stake in the company. This also includes advances made by the company which has not yet been certified by DPPL.

Financials: In an SEC filing last week, Calpian had also mentioned that the combined revenue of DPPL and MMPL was at $79.74 million for the nine month ended September 30, 2013, up from $39.14 million revenues in the same period last year. It posted a net loss of $1.93 million for the period, up from $411,623 loss in the same period last year. The company however hasn’t provided any revenue breakup of these two entities.

Money On Mobile User Base: As of October 31, 2013, Money on Mobile claims to have more than 75 million phone number customers, up from 71.4 million customers last month. The service is now supported by 1.67 lakh locations (1,67,145 locations), up from 1.63 million in the previous month.

The processed transaction volume for the month declined to 82.5 crore for the month, down from Rs 85.4 crore in the previous month. The company however noted that at current exchange rates, the transaction volume declined to $13.5 million from $14 million in September 2013, primarily due to currency fluctuations and holidays during the month including Diwali.

The monthly average revenue per user increased significantly to Rs 157 for the month, up 42.5% from Rs 110 in the last month while the average transactions increased to 2.02 transactions per user per month, up from 1.48 transactions per user per month.

Update: Error in headline corrected.