MobiKwik Share Price: Shares Debut at 58% Premium, What’s Next for Investors?

The much-anticipated MobiKwik IPO has made a strong debut on the Indian stock market today, December 18, 2024. Shares of One MobiKwik Systems Ltd., the parent company of the fintech platform MobiKwik, listed at ₹440 per share, marking a 58% premium over the IPO price of ₹279. The ₹572 crore IPO, which was a complete fresh issue of shares, saw overwhelming demand during its three-day bidding process, with an overall subscription of nearly 120 times.

MobiKwik IPO: Key Highlights

1. IPO Subscription:
   The MobiKwik IPO received bids for 141.72 crore shares, compared to the 1.18 crore shares on offer, resulting in a subscription of 120 times. The retail portion was subscribed 134.67 times, while institutional investors (QIBs) subscribed 119.5 times.
2. Grey Market Premium (GMP):
   The IPO’s GMP today is ₹166, indicating a potential listing price of ₹445 per share. This aligns closely with the actual listing price of ₹440, reflecting a 58% premium over the upper price band of ₹279.
3. Anchor Investors:
   MobiKwik raised funds from prominent anchor investors, including SBI Mutual Fund (15.54%), HDFC Mutual Fund (9.96%), and Quant Mutual Fund (15.54%), among others.
4. Business Overview:
   MobiKwik operates in three key areas:

4. Payments: Facilitating transactions between consumers and merchants.
5. Consumer Credit: Offering credit products like ZIP and ZIP EMI.
6. Investments: Providing personalized financial recommendations through tools like Lens.

MobiKwik Share Price: Listing Performance

MobiKwik shares debuted at ₹440 per share, a 58% premium to the IPO price of ₹279. This strong listing aligns with the Grey Market Premium (GMP) predictions, which had indicated a potential listing price of ₹445.

Pre-Market Discovery Price

The pre-market discovery price for MobiKwik shares was ₹442.25, reflecting a 57% premium to the IPO price. This further reinforced expectations of a stellar listing.

Why Was the MobiKwik IPO Downsized?

The MobiKwik IPO was initially planned at a larger size but was later reduced to ₹572 crore. According to the company’s management:

• Revenue Growth: The company’s revenue grew significantly, reaching ₹890 crore in FY24 compared to ₹300 crore when the IPO was first filed.
• Focus on Scaling: The downsized IPO allowed the company to focus on scaling its operations and leveraging its revenue growth.
• Use of Funds: The proceeds from the IPO will be used for product development, data analytics, machine learning, and AI to enhance its offerings.

MobiKwik’s Financial Performance and Growth Prospects

MobiKwik has strategically shifted toward higher-margin financial services, leveraging its established payment user base. The company has also achieved profitability at both EBITDA and PAT levels, a milestone that many of its competitors, such as Paytm and PhonePe, have yet to achieve.

Key Financial Metrics:

• Revenue Growth: FY24 revenue stood at ₹890 crore, showcasing significant growth.
• User Base: The platform added 10-15 million new users, further strengthening its market position.
• Profitability: MobiKwik’s profitability and focus on consumer credit products like ZIP have carved out a niche in the competitive fintech space.

Should You Buy, Sell, or Hold MobiKwik Shares?

1. For Short-Term Investors

Investors who were allotted shares in the IPO can consider booking profits at the current premium of 58%. The strong listing provides an excellent opportunity for short-term gains, especially given the speculative nature of the grey market premium.

2. For Long-Term Investors

For those with a long-term perspective, MobiKwik shares could be a promising investment. The company’s focus on profitability, consumer credit, and AI-driven product development positions it well for sustained growth in the fintech sector.

Conclusion

The MobiKwik IPO has made a stellar debut, with shares listing at a 58% premium to the issue price. The overwhelming subscription and strong demand from anchor investors reflect the market’s confidence in the company’s growth story.

While short-term investors may choose to book profits, long-term investors can hold onto the stock, given MobiKwik’s focus on profitability, innovative product offerings, and expansion in consumer credit. As the MobiKwik share price continues to trade, it will be interesting to see how the company capitalizes on its strong market debut to drive future growth.

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