The initial public offering (IPO) of One Mobikwik Systems, the parent company of Mobikwik, opens for bdding today, that is, Wednesday, December 11. The fintech player shall be offering its shares in the range of Rs 265-279 apiece, which can be applied for a minimum of 53 equity shares and its multiples thereafter. The issue will close for bidding on Friday, December 13.
Incorporated in 2009, Gurugram-based Mobikwik is a fintech company providing prepaid digital wallets and online payment services. The company provides a range of payment services, enabling consumers to pay utility bills, to make payments for online and offline purchases, transfer of money and scan QR codes and make payments using UPI or Rupay credit cards.
The Rs 572-crore IPO of Mobikwik is entirely a fresh share sale of 20,501,792 equity shares. The net proceeds from the issue shall be utilized towards funding growth in the financial services, funding growth in the payment services, investment in data, ML, AI, product and technology, capital expenditure for the payment devices business and general corporate purposes.
MobiKwik allocated 92.26 lakh shares to 21 funds at Rs 279 apiece to raise a total of Rs 257.4 crore from anchor book. Its anchor book included names like Morgan Stanley, Eastspring Investments, Government Pension Fund Global, Whiteoak Capital, Ashoka India, SBI MF, Quant MF, HDFC MF, Axis MF, 360 ONE Equity Opportunity Fund, Bandhan MF, SBI General Insurance and more.
Mobikwik has created innovative products such as MobiKwik ZIP for consumers, and merchant cash advance for merchants through in-house models and strategic partnerships with lending partners. As of June 30, 2024, the company has 161.03 million registered users and has enabled 4.26 million merchants to make and accept payments both online and offline.
For the three-months ended on June 30, 2024, the company reported a loss of Rs 6.62 crore with a revenue of Rs 345.83 crore. Mobikwik has reserved 75 per cent of the net offer for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the allocation. Retail investors will have only 10 per cent of reservation in the IPO.
SBI Capital Markets and Dam Capital Advisors (Formerly IDFC Securities) are the book running lead managers of the Mobikwik IPO, while Link Intime India Private Ltd is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on December 18, Wednesday. Here's what a host of brokerage firms said about the IPO of One Mobikwik Systems:
Anand Rathi Research Rating: Subscribe for long-term Mobikwik consistently invests in developing innovative products that deliver value to its expanding network of consumers and merchants. Each product and service on the platform offers distinct strengths and a unique value proposition. To achieve sustained growth and market leadership, it focuses on expanding and optimizing its existing business segments, said Anand Rathi.
"At the upper band, the company is valued at 155 times its FY24. Following the issuance of equity shares, the company's market capitalization stands at Rs 2,167.45 crore, with a market cap-to-sales ratio of 2.4 based on its FY24 earnings. We believe that the issue is richly priced and recommend 'subscribe for long term' rating to the IPO," it added.
Nirmal Bang Securities Rating: Subscribe One Mobikwik Systems is well-positioned in India’s fintech sector with scalable operations, profitability, and strong consumer loyalty, reflected in its low CAC of Rs 32.87 and 90.3 per cent repeat usage rate. The company reported Rs 875 crore in revenue and Rs 14 crore net profit in FY24, with a 4.2 per cent Ebitda margin, highlighting operational efficiency compared to peers, said Nirmal Bang.
"Mobikwik stands out with a 24 per cent PPI wallet market share, With an attractive valuation at 2.3 time EV/Sales the company is well-positioned for future growth. We recommend a Subscribe rating for the IPO based on its profitability, scalability, and strong brand presence, " it said.
KR Choksey Finserv Rating: Subscribe MobiKwik operates in India's fast-growing digital payments and financial services market, which offers significant long-term growth opportunities. It has strategically shifted towards higher-margin financial services, capitalizing on its established payment user base to drive this transition. MobiKwik significantly lags in registered user base and diversified service offerings, said KR Choksey.
"While the company has carved out a niche in ZIP and ZIP EMI offerings, with a growing Financial Services vertical and a low CAC/user, the company is poised to build and attract a bigger pie. The post issue Price to Sales of 2.5 times seems reasonable compared to its peers. Considering these factors, we assign a 'subscribe' rating to MobiKwik IPO," it said.
Swastika Investmart Rating: Subscribe with caution Mobikwik is a digital payment platform catering to both customers and merchants. It has demonstrated consistent growth in revenue and recently turned profitable after prior losses. However, it operates in a highly competitive fintech landscape, which may impact future growth and market share. The IPO is priced at a high valuation, said Swastika Investmart, suggesting high risk investors to apply for it.
StoxBox Rating: Subscribe MobiKwik is a two-sided payments network with 16.1 crores registered users and 0.4 crore merchants as of June 24. It aims to leverage technology as the primary factor in facilitating financial inclusion for the underserved population in India. It ranked third on the registered number of wallet users, which amounts to 135.41 million users as of FY24, said StoxBox.
"The issue is valued at a P/E of 113 times on the upper price band based on FY24 earnings, which is expensive. However, given the company’s strong market presence, improved financial performance, and industry tailwinds, we recommend a 'subscribe' rating for the issue," it added.
Ventura Securities Rating: Subscribe Mobikwik enhances the utility of its platform by continuously introducing new products across digital credit, investments, and insurance verticals. By expanding its portfolio in these areas, the company aims to transform its platform into a more compelling solution for consumers, driving both profitability and value creation, said Ventura Securities.
"The financial services sector in India remains significantly underpenetrated across various segments, including lending, insurance, and mutual funds, presenting a substantial growth opportunity for a technology-driven company like Mobikwik to capture a sizable market share," it added with a 'subscribe' rating.
Ajcon Global Services Rating: Subscribe We give a 'subscribe' rating to the issue as Mobikwik platform's capabilities will be enhanced to facilitate transactions and improve the entire financial experience for its partners, rising demand of digital financial projects and rising number of unique merchants, Ajcon Global Services.