MobiKwik IPO: An Overview

MobiKwik, India’s leading digital banking platform, offers a wide range of financial products, including payments, digital credit, and investments. Founded with a mission to provide access to financial services for Bharat (the underserved Indian population), MobiKwik is renowned for its advanced technology infrastructure, leveraging machine learning and big data analytics. It’s become a key player in the financial technology ecosystem, offering 40 million pre-approved credit users their first access to credit.

One Mobikwik Systems IPO Details

• Issue Size: ₹572 Crores (Fresh Issue of 205.01 Lakh Shares)
• Price Band: ₹265 to ₹279 per share
• Market Capitalization: ₹2,167.44 Crores at the upper price band of ₹279
• Lot Size: 53 shares
• Retail Investment Minimum: ₹14,787
• HNI Investment Minimum: ₹2,07,018 (14 lots or 742 shares)

Subscription Period and Listing Dates

• Subscription Period: December 11 to December 13, 2024
• Listing Date: Tentative listing on BSE and NSE on December 18, 2024

Grey Market Premium (GMP)

As of December 9, 2024, the Grey Market Premium (GMP) for the One Mobikwik Systems IPO stands at ₹29, showing a potential listing gain of 10.43%.

What is Grey Market Premium?
Grey Market Premium is an unofficial indicator of the demand for an IPO before it hits the stock exchange. While this metric is not guaranteed, it reflects market sentiment and investor interest in the stock. The GMP of ₹29 suggests strong demand for MobiKwik shares, but it’s important to remember that this can fluctuate until the IPO’s listing.

Subscription Status and Allotment Process

As of 12:00 PM on December 11, 2024, the One Mobikwik Systems IPO has been subscribed 2.66 times on its first day of the subscription period. This strong initial response indicates a positive sentiment towards the IPO. Retail investors looking to participate in the IPO can monitor the subscription status regularly through the official BSE link.

Allotment Date:
The allotment of shares for the MobiKwik IPO will be finalized on December 16, 2024, and investors can check their allotment status by visiting the registrar's website, Link Intime India Private Limited.

How to Check Allotment Status?

1. Navigate to the registrar’s allotment status page.
2. Select One Mobikwik Systems IPO from the list of IPOs.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to check the status.

IPO Objectives and Fund Utilization

MobiKwik plans to utilize the proceeds from this fresh issue for several key growth initiatives:

1. ₹1,500 Million for organic growth in the company’s financial services business.
2. ₹1,350 Million for expanding its payment services business.
3. ₹1,070 Million for investment in research and development in data analytics, machine learning, AI, and product technology.
4. ₹702.85 Million for working capital and general corporate purposes.

These strategic uses of funds reflect MobiKwik’s commitment to enhancing its technological infrastructure and expanding its reach across India.

Financial Performance: Key Metrics

• Revenue Growth: MobiKwik’s revenue from operations for the fiscal years 2022, 2023, and 2024 has shown consistent growth, reaching ₹8,903.15 Million in FY24.
• EBITDA: The company posted an EBITDA of ₹372.20 Million for FY24, up from a negative EBITDA in previous years.
• Profit After Tax (PAT): MobiKwik achieved a profit of ₹140.79 Million in FY24, marking a strong recovery from losses in FY23 and FY22.

Valuation and P/E Ratio

The pre-issue Earnings Per Share (EPS) is ₹2.38, with a post-issue EPS of ₹1.86. The pre-issue P/E ratio is 117.23x, and the post-issue P/E ratio is 153.95x, which is significantly higher than the industry average of 34x. This high P/E ratio indicates that the IPO is priced on the higher side, which may affect its long-term attractiveness for investors.

Key Takeaway: Although the IPO is priced high relative to industry standards, MobiKwik’s robust financial growth, expansion in digital credit, and potential to tap into the underserved market provide compelling reasons for investment.

Is the MobiKwik IPO Worth Considering?

Given its high P/E ratio and the strong growth trajectory of MobiKwik in India’s digital banking space, the IPO appears to be priced at a premium. However, considering the company's growth potential and strategic focus on expanding its services for Bharat, investors with a high-risk appetite may find the IPO worth considering for long-term growth.

Final Thoughts

MobiKwik is a pioneering force in India’s digital finance landscape, aiming to provide access to financial products for millions of unbanked citizens. While the IPO offers a potential listing gain, the valuation is on the higher side, making it essential for investors to assess their risk appetite before investing. With strong demand indicated by the GMP and subscription status, MobiKwik may prove to be a valuable addition to your portfolio if you believe in the company’s long-term growth prospects.

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