Mobikwik IPO Opens on 11 December: Second Attempt at Going Public - Will it be Successful This Time?
Mobikwik is a Gurugram-based fintech company founded in 2009 that offers a range of financial products and payment services. Mobikwik's flagship product is MobiKwik ZIP, which allows consumers to buy now and pay later within 30 days. The company is going with its IPO from December 11th to December 13th, 2024.
Mobikwik IPO Details
- One Mobikwik Systems, the parent company of Mobikwik, is launching an initial public offering (IPO) from December 11th to December 13th, 2024.
- Shares are expected to be listed on both the BSE and NSE on December 18th.
- The IPO is entirely a fresh issuance of 2.05 crore equity shares and is expected to raise ₹ 572 crore.
- The IPO price band has been set at ₹ 265 to ₹ 279 per share.
- Investors can bid for a minimum of 53 shares. 75% of the net offer is reserved for qualified institutional bidders, 15% for non-institutional investors, and 10% for retail investors.
- The book running lead managers for the Mobikwik IPO are SBI Capital Markets and Dam Capital Advisors. Link Intime India is the IPO registrar.
About Mobikwik
The company provides prepaid digital wallets and enables users to make online and offline purchases, pay bills, transfer money, and scan QR codes for payments using UPI or Rupay credit cards. They have innovative products such as MobiKwik ZIP and ZIP EMI for consumers and merchant cash advances for merchants. Mobikwik also utilizes digital public infrastructure like Aadhaar, E-Nach, Digi-Locker, and NSDL to offer users seamless and digital-first experiences. As of June 30, 2024, they had 161.03 million registered users and 4.26 million merchants.
Use of Proceeds
After the IPO, the company is expected to have a market capitalization of close to Rs 2,300 crore. Proceeds from the IPO will be used to fund growth in the company's financial and payment services, investment in data, ML, AI, product and technology, capital expenditure for their payment devices business, and for general corporate purposes.
Competition and IPO History
Mobikwik faces competition from other major players in the market, including PhonePe, Paytm, Airtel Payments Bank, and Freecharge. This IPO is the company's second attempt at going public. Mobikwik initially filed for an IPO in July 2021 for Rs 1,900 crore but shelved the plans due to unfavourable market conditions. The company has since reduced its IPO size for a third time.
Mobikwik Financials
One Mobikwik Systems Limited's revenue increased by 59% to Rs. 890.32 crore, and profit after tax (PAT) rose by 117% to Rs. 14.08 crore between the financial year ending with March 31, 2024 and March 31, 2023.
KPIs
|
Years |
FY24 |
|
ROE |
9.22% |
|
ROCE |
9.28% |
|
EBITDA Margin |
4.18% |
|
PAT Margin |
1.60% |
Strengths
- Significant User Base and Diversified Offerings: MobiKwik boasts a substantial user base of over 107 million registered users as of March 2023. This strong foundation, coupled with a diversified product portfolio, including insurance products, personal loans, and Buy Now, Pay Later (BNPL) solutions, enables MobiKwik to cater to a wide range of consumer financial needs.
- Strong Brand Recognition and Strategic Partnerships: The company's early entry into the e-wallet market and effective branding strategies have solidified its position as a trusted name in India's digital finance landscape. Strategic partnerships with over 3,500 merchants and banks further enhance MobiKwik's service offerings and market reach.
- Effective Marketing and Customer Engagement: MobiKwik's targeted marketing campaigns have driven significant growth in transaction volumes, demonstrating its ability to effectively engage and retain customers, particularly during peak periods.
Weaknesses
- Regulatory Challenges: MobiKwik operates in a highly regulated environment, primarily governed by the Reserve Bank of India (RBI). Any unfavorable regulatory changes or actions could have a substantial impact on its operations.
- Cybersecurity Threats: As a digital payments platform, MobiKwik is susceptible to data breaches and cyberattacks. Such incidents could erode its reputation, diminish customer trust, and negatively affect its business performance.
- Fierce Competition: The Indian fintech landscape is characterized by intense competition, with numerous players offering similar services. This competitive environment can exert pressure on profit margins and market share.
- Technological Reliance: While technological advancements are a key driver of growth, they also pose risks. Any failures in technological infrastructure or significant technological disruptions could adversely impact service delivery.