India’s fintech landscape is set to witness another major milestone as One Mobikwik Systems Limited, a leading digital payments company, announces its much-awaited Initial Public Offering (IPO). The IPO, aimed at raising ₹572 crore, has garnered significant attention from both institutional and retail investors, as well as the gray market. Below, we provide detailed insights into the Mobikwik IPO, including the price band, GMP (Gray Market Premium), allotment dates, financial performance, and the company’s strategic plans for utilizing the raised capital.
Mobikwik IPO: Key Dates and Subscription Details
The Mobikwik IPO will be open for subscription between December 11 and December 13, 2024. Here are the crucial dates to remember:
- Price Band: ₹265 to ₹279 per share.
- Lot Size: 53 shares, requiring a minimum investment of ₹14,787.
- Share Allotment Date: December 16, 2024.
- Refund Process Initiation: December 17, 2024.
- Shares Credited to Demat Accounts: December 17, 2024.
- Listing Date: December 18, 2024, on the stock exchanges.
The IPO’s total size consists of fresh equity issuance, with no Offer for Sale (OFS) component, which indicates the company’s focus on growth and expansion rather than providing an exit for existing shareholders.
What Makes Mobikwik’s IPO Attractive?
Mobikwik has emerged as one of India’s foremost digital payment solutions providers, backed by its strong technological infrastructure and diversified offerings. It boasts a prominent presence in mobile wallets, UPI transactions, and a growing portfolio of credit products like Mobikwik ZIP and ZIP EMI.
Gray Market Premium (GMP)
Mobikwik’s IPO is creating waves in the gray market, an unofficial platform where IPO shares are traded before listing. The current GMP for Mobikwik’s shares stands at ₹95, suggesting a potential listing price of ₹374. This represents a listing gain of approximately 34.05%, making it an attractive proposition for short-term investors.
However, it’s important to note that gray market activity is speculative, and prices can fluctuate rapidly.
How Will Mobikwik Utilize the IPO Proceeds?
Mobikwik has outlined a well-defined strategy for the allocation of the ₹572 crore raised from the IPO. Here’s a breakdown:
- ₹150 Crore: For organic growth in the financial services business.
- ₹135 Crore: To expand the company’s payment services offerings.
- ₹107 Crore: Dedicated to research and development in Artificial Intelligence (AI), machine learning, and other advanced technologies.
- ₹70.2 Crore: For capital expenditure on payment devices.
These investments underline Mobikwik’s focus on leveraging technology and innovation to bolster its competitive position in the fintech industry.
Mobikwik’s Business Overview and Financial Performance
Mobikwik, a pioneer in India’s digital payments ecosystem, has evolved from a mobile wallet company to a comprehensive fintech platform offering diverse services:
- Digital Payments: Facilitating transactions through wallets, UPI, and Zaakpay (its payment gateway).
- Credit Products: Including Mobikwik ZIP and ZIP EMI, which enable customers to access small-ticket credit seamlessly.
- Peer-to-Peer Lending: Offered through Mobikwik Extra.
Financial Performance
For FY 2024, Mobikwik reported a robust revenue of ₹875 crore, coupled with a net profit of ₹14.08 crore. This profitability milestone reflects the company’s efficient business model, which balances growth and sustainability.
The revenue streams are diversified, with digital payments contributing a significant portion, followed by credit and lending products. This diversification enhances Mobikwik’s resilience against market fluctuations and positions it as a formidable player in the rapidly growing fintech sector.
Why Mobikwik’s IPO Is a Landmark for Investors
1. Strong Market Position
Mobikwik has consistently ranked among the top fintech companies in India, driven by its innovative offerings and deep penetration in digital payments. As of May 2024, it was the largest mobile wallet company in the country, with millions of active users.
2. Expanding Services Portfolio
The company’s foray into financial services, such as lending and AI-driven solutions, demonstrates its ability to adapt to changing consumer needs and market dynamics. This versatility enhances its long-term growth potential.
3. Favorable Industry Dynamics
India’s fintech sector is poised for exponential growth, backed by government initiatives like Digital India and increasing smartphone penetration. Mobikwik is well-positioned to capitalize on these trends, ensuring sustained growth for investors.
Should You Invest in Mobikwik’s IPO?
Short-Term Gains
Given the attractive GMP of ₹95 and a potential listing gain of over 34%, Mobikwik’s IPO is expected to deliver strong short-term returns.
Long-Term Potential
Investors with a long-term horizon can benefit from Mobikwik’s:
- Scalable business model in digital payments and credit services.
- Focus on technology innovation, especially in AI and machine learning.
- Strategic allocation of IPO proceeds to fuel future growth.
However, investors should also consider market risks, such as increasing competition and regulatory challenges in the fintech space.
