Shares of fintech firm One MobiKwik Systems Ltd made a stunning market debut on Wednesday, with a massive premium of over 58 per cent against the issue price of Rs 279.
MobiKwik Shares Extend Gains After Stellar Debut, Surging 88%: Should You Buy, Sell, or Hold?
MobiKwik shares began the trade at Rs 442.25, reflecting a jump of 58.51 per cent from the issue price on the BSE
Bipin Preet Singh and Upasana Taku
Advertisement
The stock began the trade at Rs 442.25, reflecting a jump of 58.51 per cent from the issue price on the BSE. Later, it jumped 87.81 per cent to Rs 524. At NSE, shares of the firm got listed at Rs 440, surging 57.70 per cent. The company's market valuation stood at Rs 3,435.68 crore.
The One MobiKwik Systems IPO received a staggering received significant investor subscription of 125.69 times, amid overwhelming participation from investors. MobiKwik’s listing price was in line with the market expectations as the issue commanded a grey market premium of around 60 per cent.
One MobiKwik Systems raised Rs 572 crore from the IPO. It aims to utilise the net issue proceeds towards funding growth in the financial services and payment services businesses, investment in data, ML, AI, product and technology, capital expenditure for the payment devices business and general corporate purposes.
The Rs 572-crore initial share sale had a price band of Rs 265-279 per share. The public issue had a fresh issuance of equity shares worth up to Rs 572 crore with no Offer-for-Sale (OFS) component. This was the second attempt by the Gurugram-based firm for the public issue following its first attempt in July 2021.
Advertisement
Should you sell or hold?
According to analysts, the listing performance is positive, given the company’s strong fundamentals.
Abhishek Pandya, research analyst at StoxBox says the issue is valued at a P/E of 113x 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 that investors who have been allotted shares consider holding their positions from a medium to long-term perspective,” he said.
Shivani Nyati, head of wealth at Swastika Investmart Ltd says despite its high valuation and competitive fintech landscape, the company’s recent shift to profitability, coupled with the growing adoption of digital payments, boosted market confidence. However, sustaining this momentum would depend on its ability to maintain profitability and carve out a niche in the competitive fintech sector.
Advertisement
“Investors are recommended to book profits given the high listing gains, while those wanting to hold should set a stop loss at around Rs 400,” she said.
About the company
Founded by Bipin Preet Singh and Upasana Taku, MobiKwik -- the company's flagship application - provides consumers access to various payment options and financial products in digital credit, investments and insurance. The company ranked third in the registered number of wallet users, which was 135.41 million as of FY24. MobiKwik enables consumers to pay utility bills, such as mobile recharges, electricity, and credit card dues, as well as make purchases at both online and offline merchants, including retail stores and fuel stations.
One MobiKwik Systems – Financial Overview
On the financial front, the company reported a total income of Rs 3,458.29 million, demonstrating a CAGR of 28 per cent from FY22 to FY24. The company’s profit after tax (PAT) stood at Rs 140.79 million, and the EBITDA margin improved from (21.24 per cent) in FY22 to 4.18 per cent in FY24. The company became profitable at the EBITDA and PAT levels in FY24. Further, the company’s Payment GMV grew at an annual rate of 45.9 per cent and MobiKwik ZIP GMV (Disbursements) grew at an annual rate of 112.2 per cent between FY22 and FY24.
Advertisement
(Disclaimer: The views expressed by the spokespersons in this article are their own and do not constitute financial advice.)
Show comments