🧠 Food for thought

Implications, context, and why it matters.

InMobi debt carries a pre-IPO risk premium

• Pricing sits in the low teens at the operating company (the day‑to‑day business) tier and in the high teens at the holding company (the parent entity) tier. Lenders remain wary before listing 1.
• Glance, InMobi’s lock‑screen platform (a service that puts content and ads on smartphone lock screens), logged a Rs 929 crore loss on Rs 600 crore operating revenue in FY24 2. That pressures debt service at double‑digit rates.
• New borrowings are secured by the founders’ stake (shares pledged as collateral) 1. Recent raises include Glance’s Rs 200 crore loan from Stride Ventures and InMobi’s $100 million from MARS Growth Capital in 2023 2. The company now uses more debt with equity 2.

Pre‑IPO buyback opens a secondary path for credit investors

• Proceeds fund a buyback from existing investors, including SoftBank. This could enable secondary blocks alongside the credit deal, and some investors may seek equity warrants (rights to buy shares at a preset price) before the planned IPO 1.
• The dual‑tranche plan has two loans, $200 million at the operating tier and $150 million at the holding tier. Each slice carries a different risk and return across the capital structure (the mix of debt and equity) 1.
• Founder‑stake‑secured paper priced in the low to high teens could appeal if InMobi raises up to $1 billion via IPO, but downside remains given Glance’s FY24 losses and an ad‑heavy revenue mix (high reliance on advertising) 12.