MobiKwik shares poised for strong stock market debut on Dec 18; analysts recommend 'long-term hold'

MobiKwik shares poised for strong stock market debut

MobiKwik shares will be listed on the exchanges on December 18 after the issue received a staggering 119.38 times subscription in the primary market, amid an overwhelming participation from investors.

The Rs 572-crore initial share sale had a price band of Rs 265-279 per share.

Abhishek Pandya, Research Analyst at StoxBox said the issue garnered significant investor interest, and is poised for a strong debut on December 18, 2024, potentially commanding a 59 percent premium above the upper band price.

The company ranked third on the registered number of wallet users, which amounts to 135.41 million users as of 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%, and MobiKwik ZIP GMV (Disbursements) grew at an annual rate of 112.2% between FY22 and FY24. Hence, 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 added.

One Mobikwik Systems Limited is a platform business at its core, that has a two-sided payments network, consisting of consumers and merchants. The company’s aim is to leverage technology as the primary factor to facilitate financial inclusion for the underserved population in India.

Narendra Solanki, Head of Fundamental Research - Investment Services at Anand Rathi Shares said at the upper band company is valuing at 155x its FY24. "We believe that the issue is richly priced and recommend “Subscribe – Long Term” rating to the IPO."

Shivani Nyati, Head of Wealth at Swastika Investmart Ltd. added the company operates in the very competitive fintech sector, which could have an effect on its future market share and growth. "With a 126 times subscription rate and a significant grey market premium (GMP), the IPO received a resounding reaction, demonstrating great investor confidence. It is anticipated that the stock will list at a substantial premium of roughly 59%."

The public issue is entirely a fresh issuance of equity shares worth up to Rs 572 crore with no offer-for-sale (OFS) component.

Mobikwik has reduced its IPO size from its earlier plans of Rs 1,900 crore in 2021 to Rs 700 crore in January this year to Rs 572 crore now.

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