One Mobikwik Systems, the digital banking platform behind MobiKwik, is making waves in India by offering an extensive range of financial products such as payments, digital credit, and investments. The company uses big data analytics and machine learning to create delightful experiences for both consumers and merchants. With 40 million credit pre-approved users, MobiKwik is on a mission to provide India’s underserved population with their first access to credit.

One Mobikwik Systems IPO Details

The One Mobikwik Systems IPO is a Book Built Issue of ₹572 Crores, consisting solely of a Fresh Issue of 205.01 Lakh Shares. The IPO opens on December 11, 2024, and closes on December 13, 2024. The price band is set between ₹265 and ₹279 per equity share, with a lot size of 53 shares. Retail investors need to invest a minimum of ₹14,787, while High-Net-Worth Individuals (HNIs) are required to invest a minimum of 14 lots (742 shares), amounting to ₹2,07,018.

At the upper end of the IPO price range, the Market Capitalisation of the company will be ₹2,167.44 Crores. The allotment is expected to be finalized on December 16, 2024, and the shares are scheduled to list on December 18, 2024.

Grey Market Premium (GMP) and Subscription Status

As of December 13, 2024, the One Mobikwik Systems IPO has been subscribed 119.38 times on its final day of subscription. The Grey Market Premium (GMP) currently stands at ₹78, indicating a potential 27.95% gain on listing. The expected listing price is ₹357, based on the GMP trend.

It is important to note that GMP is a speculative figure, determined by unregulated market forces, and should not be used as the sole determinant for investment decisions.

Financial Performance & Valuation

MobiKwik has shown strong growth, with revenues rising from ₹5,432.19 Million in FY22 to ₹8,903.15 Million in FY24. However, the company has faced challenges, with EBITDA remaining negative in FY23 and FY22, indicating operational pressures. In FY24, EBITDA turned positive at ₹372.20 Million, and the profit after tax (PAT) for FY24 was ₹140.79 Million, a significant recovery from the previous two years.

The company’s pre-issue P/E ratio stands at 117.23x, and its post-issue P/E ratio rises to 153.95x, compared to the industry P/E ratio of 34x. These ratios suggest that the IPO is fully priced, making it less attractive from a valuation perspective.

Objectives of the One Mobikwik Systems IPO

The proceeds from the Fresh Issue will be used for the following purposes:

1. ₹1,500 Million for funding organic growth in the financial services business.
2. ₹1,350 Million for expanding the payment services business.
3. ₹1,070 Million for research and development in data, machine learning (ML), AI, and technology products.

Investment Recommendation

Given the high P/E ratio, fully priced IPO, and the declining profitability over recent years, we recommend investors to avoid applying for the One Mobikwik Systems IPO, especially if seeking listing gains or long-term investment opportunities. While the company’s growth potential in the digital banking space is notable, the current valuation may not justify an immediate investment.

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The Current active IPO is and International Gemmological, Hamps Bio, Yash Highvoltage and Inventurus Knowledge.

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