The Mobikwik IPO, launched by One Mobikwik Systems, is open for subscription from December 11 to December 13, 2024. The fintech company offers a range of digital payment services, including prepaid wallets, UPI payments, and merchant cash advances.
IPO Details
- Issue Size: ₹572 crore
- Price Band: ₹265-₹279 per share
- Lot Size: Minimum 53 shares
- Reservation:
- 75% for Qualified Institutional Buyers (QIBs)
- 15% for Non-Institutional Investors (NIIs)
- 10% for Retail Investors
The IPO consists entirely of a fresh share sale of 20.5 million equity shares, with proceeds earmarked for business expansion, technology investments, and debt repayment.
About Mobikwik
Incorporated in 2009, Mobikwik is a Gurugram-based fintech company specializing in digital wallets, UPI-based payments, and financial services. It has 161 million registered users and supports 4.26 million merchants, making it one of India’s leading payment platforms.
Key Financial Highlights
- H1 FY25 Performance:
- Revenue: ₹345.83 crore
- Net Loss: ₹6.62 crore
- FY24 Performance:
- Revenue: ₹875 crore
- Net Profit: ₹14 crore
- EBITDA Margin: 4.2%
Use of Proceeds
The net proceeds from the IPO will be allocated to:
- Expanding financial services and payment solutions.
- Investments in AI, ML, and product development.
- Funding growth in the payment device business.
- General corporate purposes.
Anchor Investors
Mobikwik raised ₹257.4 crore from 21 anchor investors, including:
- Morgan Stanley
- Eastspring Investments
- SBI Mutual Fund
- HDFC Mutual Fund
- Axis Mutual Fund
Expert Opinions
Anand Rathi Research
- Rating: Subscribe (Long-Term)
- Analysis: The company offers innovative products and has scalable operations. While valuation is high, long-term prospects are favorable.
Nirmal Bang Securities
- Rating: Subscribe
- Analysis: Mobikwik has shown profitability and scalability with a low customer acquisition cost of ₹32.87. Valued at 2.3x EV/Sales, it is well-positioned for growth.
KR Choksey Finserv
- Rating: Subscribe
- Analysis: Mobikwik’s focus on high-margin financial services and its niche offerings make it a promising investment despite its smaller user base compared to peers.
Swastika Investmart
- Rating: Subscribe with Caution
- Analysis: Competitive fintech landscape poses risks. High valuation appeals to high-risk investors only.
StoxBox
- Rating: Subscribe
- Analysis: Strong market presence and improved financials, though the valuation of 113x P/E appears high.
Strengths
- Large User Base: 161 million registered users and 4.26 million merchants.
- Innovative Products: ZIP EMI and merchant cash advance services cater to diverse consumer needs.
- Market Potential: Positioned to capitalize on India’s growing digital payments ecosystem.
Risks
- High Valuation: Priced at a P/E of 113x, which may deter conservative investors.
- Competitive Market: Operates in a crowded fintech landscape.
- Profitability Concerns: Recent profitability is positive but sustainability remains uncertain.
Should You Subscribe?
Why You Should Subscribe:
- Scalable business model in a high-growth fintech market.
- Strong consumer loyalty with a 90.3% repeat usage rate.
- Strategic shift towards financial services with higher margins.
Cautionary Factors:
- Expensive valuation compared to peers.
- Intense competition may impact future growth.
Conclusion
Mobikwik’s IPO presents an attractive opportunity for long-term investors looking to participate in India’s booming digital payments market. However, high valuation and competitive risks warrant caution for short-term gains.
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