The fintech behemoth One MobiKwik Systems Ltd. had a spectacular stock market debut, ending at ₹528 per share on the NSE, an astounding 89.24% increase from its IPO price of ₹279 per share. The digital payments platform located in Gurugram has achieved a major milestone with the overwhelmingly positive response from investors.
A Remarkable Listing Day Performance
MobiKwik’s shares opened with a bang on December 18, listing at ₹440 on the NSE, a 57.71% premium to its issue price. The performance on the BSE was similarly remarkable, with shares listing at ₹442.25, reflecting a 58.51% premium.
By the end of the trading day, the stock settled at ₹528 on the NSE, showcasing an 89.24% gain, reaffirming investor confidence in the company’s growth story and strong fundamentals. This impressive debut brought MobiKwik’s market valuation to ₹3,890.14 crore.
Overwhelming IPO Subscription
MobiKwik’s initial public offering (IPO) witnessed unprecedented demand, being oversubscribed 119.38 times. Investors bid for over 141 crore shares, far exceeding the 1.18 crore shares on offer.
With a price range of ₹265-₹279 per share, the IPO generated bids worth a staggering ₹39,542 crore. The public issue was entirely a fresh issuance of equity shares, raising ₹572 crore with no offer-for-sale (OFS) component.
What Analysts Are Saying
Narendra Solanki, Head of Fundamental Research – Investment Services at Anand Rathi Shares, described the company as richly valued at 155x its FY24 earnings at the upper price band. Despite the premium pricing, Solanki gave a “Subscribe – Long Term” rating, citing MobiKwik’s strong growth trajectory and its pivotal role in India’s financial inclusion journey.
MobiKwik’s Unique Value Proposition
MobiKwik operates a two-sided payments network that connects millions of consumers with a wide array of merchants. With a mission to facilitate financial inclusion for India’s underserved population, the company leverages cutting-edge technology to simplify payments and enhance accessibility.
A Growing User Base
MobiKwik ranks third in India in terms of wallet users, boasting a massive base of 135.41 million registered users as of FY24. Its expansive ecosystem also includes partnerships with merchants and financial institutions, making it a significant player in India’s digital payments landscape.
Why Investors Are Bullish on MobiKwik
Several factors contributed to the strong response to MobiKwik’s IPO and subsequent listing-day success:
Digital Payments Boom: India’s digital payments sector is growing exponentially, driven by increasing smartphone penetration, government initiatives, and the shift to cashless transactions.
Scalable Business Model: MobiKwik’s platform-based approach enables seamless interaction between consumers and merchants, offering significant scalability potential.
Strong Financial Inclusion Mission: The company’s focus on serving the underserved population resonates with investors who see long-term value in inclusive financial services.
Impressive Growth Metrics: The company has demonstrated steady growth in user acquisition and transaction volumes, establishing itself as a leader in the fintech space.
Challenges Ahead
Even with its successful launch, MobiKwik has trouble keeping up its growth rate. Players like Paytm, PhonePe, and Google Pay are fighting for market share in India’s fiercely competitive digital payments business. High valuations may also put pressure on the business to maintain profitability and success over time.
The Road Ahead
With the money raised from the IPO, MobiKwik intends to improve its technology infrastructure, increase the range of products it offers, and support its expansion objectives. The company wants to firmly establish itself as a leader in the ecosystem of digital payments by emphasizing innovation and user involvement.
Conclusion
The impressive stock market debut of MobiKwik is evidence of the increasing interest of Indian investors in fintech potential. The business is ideally positioned to benefit from the rapidly expanding digital payments market thanks to its solid foundation, creative strategy, and dedication to financial inclusion.
To maintain investor trust over the long run, MobiKwik will need to strike a balance between growth and profitability as it negotiates the intricacies of a cutthroat market.
