MobiKwik, India’s leading digital banking platform, has launched its Initial Public Offering (IPO) today. The IPO comprises a fresh issue of ₹572 crore, with no offer for sale component. It offers 205.01 lakh shares at a price band of ₹265 to ₹279 per share, valuing the company at ₹2,167.44 crore at the upper price band. The IPO will remain open from December 11 to December 13, 2024.

Company Background

MobiKwik is a technology-driven platform offering digital payments, credit solutions, and investments to consumers and merchants. It leverages big data analytics and machine learning to enhance its services, catering to over 40 million pre-approved credit users.

The company’s revenues for FY2024 stood at ₹8,903.15 million, showing significant growth compared to FY2023 (₹5,611.16 million). Its EBITDA turned positive for the first time in FY2024 at ₹372.20 million.

IPO Objectives

The proceeds from the fresh issue will be allocated as follows:

1. ₹150 crore for organic growth in financial services.
2. ₹135 crore for expansion of payment services.
3. ₹107 crore for research and development in AI, ML, and technology.

Investment Highlights

MobiKwik’s valuation is considered fully priced, with pre-issue and post-issue P/E ratios of 117.23x and 153.95x, respectively. The IPO has a minimum lot size of 53 shares, requiring a retail investment of ₹14,787. HNIs need to invest in 14 lots, amounting to ₹2,07,018.

Subscription and Grey Market Premium (GMP)

The IPO has already garnered attention in the grey market, with a premium of ₹47, indicating potential listing gains of 16.92%. However, investors are advised to interpret GMP cautiously, as it depends on demand and supply dynamics in an unregulated market.

Day-wise GMP Trends

• Dec 11, 2024: GMP ₹47, expected listing price ₹326
• Dec 9, 2024: GMP ₹29, expected listing price ₹308

Anchor Investors

MobiKwik raised ₹257.40 crore from anchor investors at ₹279 per share, allotting 92.25 lakh shares.

How to Check Allotment

The allotment will be finalized on December 16, 2024, and investors can check their status online by:

• Visiting the IPO registrar’s website.
• Entering details like PAN, application number, or DP ID.

Financial Metrics and Analyst Review

MobiKwik’s return on equity (ROE) for FY24 is 9.22%, while its return on capital employed (ROCE) is 9.28%. These metrics, coupled with its valuation, indicate that the IPO is fully priced.

Recommendation
While MobiKwik shows strong growth in revenues and profitability, the IPO’s valuation appears stretched. Analysts recommend avoiding this IPO for both listing gains and long-term investments.

Stay tuned for updates on subscription status and listing performance.