Mobikwik IPO: A New Chapter for the Fintech Giant
The Indian primary market is abuzz with excitement as One Mobikwik Systems Limited launches its initial public offering (IPO). The bidding for this much-anticipated public issue commenced on Wednesday, December 11, 2024, and will remain open until 5:00 PM on December 13, 2024. With a price band set between ₹265 and ₹279 per equity share, Mobikwik aims to raise ₹572 crore through this entirely fresh public offer.
Key Details of the Mobikwik IPO
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Price Band and Lot Size: The Mobikwik IPO has a fixed price band of ₹265 to ₹279 per equity share. Investors can apply in lots, with one lot comprising 53 shares.
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Subscription Status: By the end of the second day of bidding, the IPO had garnered significant interest, being subscribed 20.41 times overall. The retail portion saw an impressive subscription rate of 64.65 times, while the non-institutional investor (NII) segment was booked 30.07 times. The qualified institutional buyer (QIB) segment was also strong, with 84% of the shares subscribed.
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Grey Market Premium: According to market observers, Mobikwik shares are currently trading at a premium of ₹136 in the grey market, indicating strong demand and investor interest.
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Allotment and Listing Dates: The expected date for share allotment is December 14, 2024, with a potential delay announcement on December 16, 2024. The shares are anticipated to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on December 18, 2024.
- Use of Proceeds: The funds raised from the IPO will be utilized to enhance financial and payment service growth, invest in data analytics, artificial intelligence, and machine learning, as well as to improve products and technology.
Financial Performance and Growth Prospects
Mobikwik has demonstrated impressive financial growth, with a year-on-year revenue increase of 59% and a staggering 117% rise in profit after tax (PAT). The company’s total income reached ₹3,458.29 million, showcasing a compound annual growth rate (CAGR) of 28% from FY22 to FY24. Notably, Mobikwik has turned profitable at both the EBITDA and PAT levels in FY24, marking a significant turnaround from previous losses.
Despite the promising growth, analysts have noted that the company’s total borrowings are on the rise, which could pose risks in the future. The price-to-earnings (P/E) ratio stands at 113.32 before the IPO, which may adjust to -86.75 post-issue, indicating a potentially high valuation.
Analyst Recommendations: To Subscribe or Not?
Several analysts have weighed in on the Mobikwik IPO, providing insights for potential investors:
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VLA Ambala, Co-founder of Stock Market Today: Ambala has assigned a ‘buy’ tag to the IPO, citing Mobikwik’s strong revenue growth and market presence. He notes that the price band of ₹265 to ₹279 per share is moderate, making it an attractive option for investors.
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InBP Equities: This firm has also given a ‘subscribe’ rating, highlighting the growth trajectory of digital payments and Mobikwik’s expanding market share. They emphasize the company’s strong financial performance and the potential for future growth in the fintech sector.
- Swastika Investmart: They have assigned a ‘subscribe’ tag as well, acknowledging Mobikwik’s consistent revenue growth and recent profitability. However, they caution that the competitive fintech landscape may impact future growth.
Conclusion
The Mobikwik IPO represents a significant opportunity for investors looking to tap into the burgeoning fintech sector in India. With strong financials, a robust growth trajectory, and a favorable market environment, Mobikwik is poised to make a substantial impact. However, potential investors should consider the associated risks and consult with certified experts before making investment decisions. As the bidding period unfolds, all eyes will be on Mobikwik to see how this fintech giant navigates its journey into the public market.