 "Mobikwik IPO opens today: GMP zooms 49%; should you park your money?")
Mobikwik IPO GMP: The initial public offering (IPO) of digital wallet and online payment services provider, One Mobikwik Systems, opens for public subscription today, Wednesday, December 11, 2024. At the upper end, the company seeks to raise Rs 572 crore by offering an entirely fresh issue of 20,501,792 equity shares, as outlined in the Red Herring Prospectus (RHP).
The Mobikwik IPO is available at a price band of Rs 265–Rs 279 per share, with a minimum lot size of 53 shares. Accordingly, investors can bid for a minimum of 53 shares and in multiples thereof. A retail investor would require a minimum of Rs 14,787 to bid for one lot or 53 shares of the Mobikwik IPO. Similarly, for a maximum bid of under Rs 2,00,000, retail investors can apply for up to 13 lots, totaling 689 shares.
Meanwhile, Mobikwik shares are buzzing in the grey market ahead of the IPO launch. Sources tracking grey market activities revealed that Mobikwik shares were trading at Rs 415 apiece, reflecting a grey market premium (GMP) of Rs 136 or 48.75 per cent per share against the upper end of the IPO price band of Rs 279. Also read: Sai Life Sciences IPO details
The subscription window to bid for the Mobikwik IPO is expected to conclude on Friday, December 13, 2024.
Following the closure of the subscription window, the basis of allotment of Mobikwik IPO shares is expected to be finalised on Monday, December 16, 2024. Successful allottees will get the shares credited to their demat accounts by Tuesday, December 17, 2024.
Mobikwik shares are expected to list on the BSE and NSE tentatively on Wednesday, December 18, 2024.
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According to the RHP, Mobikwik plans to utilise the net proceeds for funding organic growth in its financial services and payment services businesses, research and development in data, machine learning (ML), artificial intelligence (AI), and technology, capital expenditure for its payment devices business, and general corporate purposes.
Link Intime India is the registrar for the Mobikwik IPO. The book-running lead managers for the issue include SBI Capital Markets and DAM Capital Advisors (formerly IDFC Securities). Also Read: Purple United Sales IPO details
Should you Subscribe to Mobikwik IPO?
Bajaj Broking - Subscribe for long-term
Analysts at Bajaj Broking have recommended subscribing to the public offering of Mobikwik from a long-term perspective. According to the brokerage, the company’s strengths include its legacy of providing a positive and sustainable consumer experience, its efficient operational management of loan products, and the strong trust in its brand. Its technology-first approach to business is another positive factor.
However, analysts also highlighted risks such as potential security breaches and attacks against the platform, which could damage its reputation and materially affect its business, financial condition, and results of operations. The analysts said, “We recommend subscribing to the IPO with a long-term perspective.”
Swastika Investmart - Suitable for high-risk investors
Swastika Investmart, in its research note, has recommended subscribing to the issue only for high-risk investors. Although the company has demonstrated consistent growth in revenue and recently turned profitable after prior losses, Swastika Investmart said that the company operates in a highly competitive fintech landscape, which may impact its future growth and market share. The brokerage further said that the Mobikwik IPO is priced at a high valuation.
Anand Rathi Research - Subscribe for long-term
Analysts at Anand Rathi Research have recommended subscribing to the public offering from a long-term perspective. At the upper band, the analysts said the company is valued at 15.5x its FY24 earnings. Following the issuance of equity shares, the company's market capitalisation stands at Rs 2,167.45 crore, with a market cap-to-sales ratio of 2.4 based on its FY24 earnings.
The company is preparing to introduce additional services, such as investments and insurance, to establish itself as a comprehensive digital platform for financial services. According to analysts, this is expected to boost its future revenue and profits. However, the company reported losses for Q1 FY25 due to pre-funding cost adjustment provisions.
"We believe that the issue is richly priced and recommend a 'Subscribe - long-term' rating to the IPO," the analysts said.
About One Mobikwik Systems
Incorporated in March 2008, One Mobikwik Systems is a fintech company offering prepaid digital wallets and online payment services. The company provides various payment solutions, including utility bill payments, online and offline purchases, and money transfers. At its core, Mobikwik operates as a platform business with a two-sided payments network consisting of consumers and merchants.