The eagerly awaited Mobikwik IPO has arrived, representing a pivotal moment for One Mobikwik Systems Limited, a prominent name in India’s digital payments and fintech industry. Opening for public subscription from December 11 to December 13, 2024, this IPO has sparked widespread interest as investors assess its potential to enhance their portfolios. In this blog, we delve into the key details, grey market premium (GMP), subscription status, financial performance, and expert opinions to help you decide if the Mobikwik IPO is a good fit for your investment strategy.
Mobikwik IPO Details
Here’s everything you need to know about the IPO:
- IPO Dates: The subscription period for the Mobikwik IPO is from December 11 to December 13, 2024.
- Price Band: The IPO’s price range is established at ₹265 to ₹279 per equity share.
- Lot Size: Investors can bid in lots of 53 shares each.
- Issue Size: The total IPO size is ₹572 crore, entirely comprising fresh equity shares.
- Listing Date: The shares are expected to list on BSE and NSE on December 18, 2024.
- Registrar: Link Intime India Private Limited is the official registrar for the issue.
- Lead Managers: The lead managers are DAM Capital Advisors and SBI Capital Markets.
Grey Market Premium (GMP)
The grey market premium (GMP) for Mobikwik shares as of December 11, 2024, is ₹136. The expected listing price is positioned at ₹415 with the upper price band set at ₹279. This indicates a possible gain of about 48.75% over the issue price.
Subscription Status
On the first day of bidding, the Mobikwik IPO received an overall subscription of 7.32 times. Here’s a breakdown of the category-wise subscriptions:
- Retail Investors: 26.75 times
- Non-Institutional Investors (NII): 8.98 times
- Qualified Institutional Buyers (QIB): 0.02 times
The high retail investor interest underscores the widespread confidence in the company’s growth potential.
Company Overview
Since its inception in 2009, Mobikwik has positioned itself as a key player in India’s digital payments landscape. Its services span across mobile wallet solutions, utility bill payments, UPI transactions, and the Buy Now Pay Later (BNPL) segment, powered by its flagship offering, MobiKwik ZIP. Serving over 100 million users and collaborating with a network of 3 million merchants, Mobikwik has established a strong foothold in the country’s rapidly expanding digital economy.
Financial Performance
Mobikwik’s financial growth showcases remarkable progress:
- Revenue Expansion: Achieved an impressive 59% year-on-year growth in FY24.
- Profit After Tax (PAT): Surged by 117% compared to the previous year, reflecting enhanced profitability.
- EBITDA Turnaround: Transitioned from a margin of -21.24% in FY22 to a positive 4.18% in FY24.
- Payment GMV Growth: Witnessed a steady annual growth rate of 45.9% between FY22 and FY24.
- MobiKwik ZIP GMV Increase: Recorded a significant annual growth rate of 112.2% in disbursements during this period.
By reaching profitability at both EBITDA and PAT levels in FY24, Mobikwik demonstrates its strong financial stewardship and potential for sustained growth.
Strengths of the Mobikwik IPO
- Strong Market Presence: Mobikwik is a trusted name in the digital payments ecosystem, with a growing user base and merchant network.
- Industry Growth: The digital payments market in India is expanding rapidly, with transaction values projected to grow at a CAGR of 22% between FY24 and FY28.
- Diversified Revenue Streams: Apart from payment services, the company generates revenue from BNPL offerings, merchant solutions, and data monetization.
- Innovative Technology: Investments in AI, machine learning, and data analytics position Mobikwik as a technology-driven leader in the fintech space.
Challenges and Risks
- High Valuations: At a P/E ratio of 113x (upper price band), the IPO is considered expensive, which may deter some investors.
- Competitive Landscape: The fintech sector in India is highly competitive, with players like Paytm, PhonePe, and Google Pay posing significant challenges.
- Regulatory Risks: Changes in digital payments regulations could impact the company’s operations and profitability.
Expert Opinions
- VLA Ambala, Co-founder of Stock Market Today, has assigned a “BUY” rating, citing the company’s robust financial growth and strategic focus on expanding its services.
- BP Equities has also given a “SUBSCRIBE” recommendation, emphasizing Mobikwik’s strong market presence, improved financial metrics, and the growth trajectory of India’s digital payments sector.
Should You Apply for the Mobikwik IPO?
The Mobikwik IPO stands as a gateway for investors to participate in India’s burgeoning digital payments revolution. The company’s robust financial performance, coupled with its focus on technological innovation and a wide market presence, underscores its potential for sustained growth. However, investors should weigh the premium valuations and industry competition carefully.
For those with a long-term investment perspective and a tolerance for risk, the Mobikwik IPO could present a valuable opportunity. Retail investors, encouraged by optimistic grey market premiums and robust subscription figures, may also view this as a chance to capitalize on anticipated listing gains.
Conclusion
The Mobikwik IPO is a landmark event in India’s fintech industry, reflecting the rising prominence of digital payments. While the high valuations might be a concern for some, the company’s strong fundamentals, growth prospects, and strategic initiatives make it a compelling choice for both retail and institutional investors. As always, ensure that your investment decision aligns with your financial goals and risk tolerance.
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