One MobiKwik IPO GMP

One MobiKwik Systems Limited, a prominent player in India’s digital payments landscape, is set to launch its Initial Public Offering (IPO) on December 11, 2024. This guide provides comprehensive details about the IPO, including key dates, financials, Grey Market Premium (GMP), and essential considerations for investors.

IPO Details:

• Issue Period: December 11 to December 13, 2024
• Price Band: ₹265 to ₹279 per equity share
• Issue Size: Entirely a fresh issue of 2.05 crore equity shares, aggregating to approximately ₹572 crore
• Lot Size: 53 shares per lot
• Minimum Investment: ₹14,787 (at the upper price band)

Key Dates:

• Anchor Investor Bidding: December 10, 2024
• IPO Opening Date: December 11, 2024
• IPO Closing Date: December 13, 2024
• Allotment Finalization: December 16, 2024
• Refunds Initiation: December 17, 2024
• Shares Credit to Demat Accounts: December 17, 2024
• Listing Date: December 18, 2024

Company Overview:

Founded in 2009, MobiKwik has evolved into a leading digital financial services platform in India, offering a mobile wallet, Buy Now Pay Later (BNPL) services, and payment gateway solutions. The platform boasts over 120 million users and 3 million merchants, emphasizing its significant presence in the digital payments sector.

Financial Performance:

As of the fiscal year ending March 31, 2024, MobiKwik reported:

• Total Income: ₹540 crore
• Net Loss: ₹80 crore

The company has been focusing on reducing losses and achieving profitability through strategic initiatives and expansion of its service offerings.

Grey Market Premium (GMP):

As of December 8, 2024, the GMP for MobiKwik’s IPO is approximately ₹111, indicating a potential listing price of ₹390 per share. This suggests a premium of about 39.78% over the upper end of the price band, reflecting strong investor interest.

 

Utilization of Proceeds:

The net proceeds from the IPO are intended for:

• Customer and Merchant Acquisition: Enhancing the user base and merchant network.
• Technological Infrastructure: Investing in technology to improve platform capabilities.
• General Corporate Purposes: Supporting overall business growth and operational efficiency.

Investor Considerations:

• Market Position: MobiKwik operates in a highly competitive digital payments market, facing competition from established players like Paytm and PhonePe.
• Regulatory Environment: The fintech sector is subject to evolving regulations, which could impact operations.
• Financial Health: While the company is on a path to profitability, investors should consider the current financial metrics and future projections.

How to Apply:

Investors can apply for the MobiKwik IPO through:

• ASBA (Application Supported by Blocked Amount): Available via net banking services of participating banks.
• UPI (Unified Payments Interface): For retail investors applying through brokers offering UPI as a payment option.

Conclusion:

MobiKwik’s IPO presents an opportunity to invest in a growing digital payments company with a substantial user base and diverse service offerings. However, potential investors should carefully assess the company’s financial health, market competition, and regulatory landscape before making investment decisions.

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Additional Information for Investors: One MobiKwik IPO

Company Background and History:

1. Foundation and Vision:
   One MobiKwik Systems Limited was founded in 2009 by Bipin Preet Singh and Upasana Taku, with the vision to simplify digital payments for users and merchants in India. It began as a mobile wallet and later diversified into Buy Now Pay Later (BNPL), payment gateways, and financial services.
2. Milestones Achieved:
   • In 2014, MobiKwik received authorization from the Reserve Bank of India (RBI) as a Prepaid Payment Instrument (PPI) issuer.
   • In 2017, it launched its Unified Payments Interface (UPI) services, becoming a significant player in the UPI ecosystem.
   • By 2021, it reached over 120 million users and 3 million merchants, further establishing its presence in India’s fintech space.
3. Investor Backing:
   MobiKwik has attracted investments from marquee investors like Sequoia Capital, American Express, and Bajaj Finance. These investments have fueled its growth and expansion into new services.

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Business Model:

1. Key Services:
   • Mobile Wallet: Enables users to make secure and quick payments for a wide array of services, from shopping to utility bills.
   • BNPL (Buy Now Pay Later): Provides instant credit to users, a rapidly growing segment in the digital economy.
   • Payment Gateway: Offers a seamless payment solution for merchants, enhancing transaction efficiency.
   • Financial Services: Includes personal loans, insurance, and investments for its users.
2. Revenue Streams:
   • Merchant commissions on transactions.
   • Interest and fees from BNPL services.
   • Subscription fees from premium financial products.

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Industry and Market Context:

1. Digital Payments Growth:
   The Indian digital payments market is projected to grow at a CAGR of over 20% in the coming years, driven by increased smartphone penetration, internet connectivity, and government initiatives like Digital India.
2. Competitive Landscape:
   MobiKwik competes with giants like Paytm, PhonePe, and Google Pay. However, its focus on BNPL and its merchant network gives it a unique edge.

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Future Outlook:

1. Growth Drivers:
   • The rising adoption of BNPL services positions MobiKwik as a leader in consumer credit solutions.
   • Expansion into Tier 2 and Tier 3 cities to tap underserved markets.
   • Partnerships with merchants and businesses to drive transactions on its platform.
2. Potential Challenges:
   • Regulatory changes in the fintech sector, especially around digital lending and data privacy.
   • Increasing competition from global and domestic players.
3. Tech Advancements:
   MobiKwik is investing in AI and big data analytics to enhance user experience, reduce defaults in BNPL, and improve financial service delivery.

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Investor Guide:

1. IPO Evaluation:
   • Growth Potential: MobiKwik operates in a high-growth sector with strong demand drivers, making it a promising long-term bet.
   • Valuation Metrics: Compare MobiKwik’s valuations with peers like Paytm to determine if the IPO price is justified.
2. Application Tips:
   • Use ASBA or UPI for seamless application.
   • Monitor the grey market premium (GMP) as it indicates short-term investor sentiment.
3. Investment Strategy:
   • For Listing Gains: Look at GMP trends and subscription figures for insights on potential short-term performance.
   • For Long-Term Investment: Assess MobiKwik’s path to profitability and its ability to retain market share in a competitive industry.

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Key Facts:

1. User Base: Over 120 million registered users.
2. Merchant Network: More than 3 million merchants onboarded.
3. BNPL Adoption: Contributes a significant share to the company’s revenue.
4. Tech Integration: First to integrate UPI, wallet, and BNPL services into a single platform.

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Practical Tips for Investors:

1. Diversify Your Portfolio: Don’t overexpose your investments to fintech. Balance your holdings across sectors.
2. Analyze Financials: MobiKwik is on the path to profitability but isn’t profitable yet. Assess the timeline for break-even.
3. Monitor Regulatory Changes: Fintech regulations can impact MobiKwik’s business model, particularly its BNPL offerings.

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Conclusion:

MobiKwik’s IPO offers a unique opportunity to invest in India’s booming digital payments ecosystem. With a strong focus on BNPL and financial services, it is well-positioned for future growth. However, investors should weigh the risks associated with competition and profitability challenges before committing.

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