Shares of MobiKwik Systems surged during their debut on the BSE, delivering a remarkable return to investors.
The stock opened at Rs 442.25, reflecting an initial premium of 58.51%, and has since fluctuated between a high of Rs 524 and a low of Rs 439.20. Over 1.45 lakh shares have already changed hands, underscoring the stock’s popularity among investors.
A Strong IPO Backing
The initial public offer (IPO) of MobiKwik Systems received an overwhelming response, with subscriptions reaching 119.38 times. The IPO was open for bidding from December 11 to December 13, 2024, with a price band of Rs 265 to Rs 279 per share.
The IPO raised Rs 572 crore through a fresh issue of equity shares, marking a significant milestone for the company. The proceeds from the issue are strategically allocated to support MobiKwik’s long-term growth ambitions and enhance its capabilities in the digital payments ecosystem.
Strategic Utilization of Funds
MobiKwik plans to utilize Rs 150 crore of the net proceeds for default loss guarantees (DLG) to lending partners.
These guarantees are a crucial requirement under the DLG guidelines introduced in 2023, mandating lending service providers (LSPs) to offer guarantees of up to 5% on loan disbursements for regulated entities (REs).
Additionally, the company will allocate Rs 35 crore to pre-fund escrow and biller accounts, enabling instant settlements for consumers and merchants.
Another Rs 100 crore is earmarked for acquiring new customers in the digital payments ecosystem, highlighting the company’s commitment to expanding its market share.
MobiKwik is also investing Rs 27.8 crore to bolster its teams in data science, machine learning, and artificial intelligence.
Rs 79.2 crore will be used to further strengthen its technological infrastructure to enhance product and technology teams. The company is also channeling Rs 70.285 crore towards hardware investments, including POS machines and sound boxes, to solidify its presence among consumers and merchants.
Robust Business Model Driving Growth
Since its incorporation in 2008, MobiKwik has established itself as a leader in digital financial services and payments.
Initially launched as a mobile wallet, the company has diversified its offerings to include credit services such as MobiKwik ZIP and ZIP EMI, digital payments through UPI and Zaakpay, and peer-to-peer lending via MobiKwik Xtra.
This diversified portfolio has enabled MobiKwik to achieve a balanced revenue mix, with a 50-50 split between financial services and digital payments in Q1 FY2025. The company leverages big data analytics and machine learning to optimize its services and cater to a growing user base.
Impressive Market Presence
As of June 30, 2024, MobiKwik had 161.03 million registered users, growing at a CAGR of 12.31% from FY2022 to FY2024.
The platform also enabled 4.26 million merchants to accept online and offline payments. With a 23.11% market share in the PPI wallet gross transaction value (GTV), MobiKwik has cemented its position as the largest wallet player in India.
The company’s Payment GMV has been growing at an impressive annual rate of 45.88%, while its MobiKwik ZIP GMV has surged by 112.16% annually over the same period, reflecting its success in the digital credit space.
Financial Snapshot
Despite its rapid growth, MobiKwik reported a consolidated net loss of Rs 6.62 crore for the quarter ended June 30, 2024. However, its income from operations stood at Rs 342.27 crore, demonstrating robust revenue generation.
Promoter Shareholding and Pre-IPO Anchor Investments
Post-IPO, the promoter shareholding in MobiKwik Systems diluted to 25.2% from 34.2% pre-IPO. Ahead of the IPO, the company raised Rs 92.25 lakh from anchor investors on December 10, 2024, allotting 257.40 crore shares at Rs 279 each to 21 anchor investors, reflecting strong institutional interest.
MobiKwik’s stellar debut highlights its strong market positioning and the growing investor confidence in the digital payments sector.
With strategic investments in technology, customer acquisition, and merchant solutions, the company is well-positioned to drive growth in India’s rapidly evolving fintech ecosystem.
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