Mobikwik IPO Listing: Stock lists at 58% premium over IPO Price
Mobikwik IPO Listing
Mobikwik IPO Listing: A Stellar Debut with 58% Gains for Investors
The Mobikwik IPO made a strong and impressive debut on the stock market on Wednesday, December 18, 2024. The company’s shares opened at ₹440, which was a remarkable 57.71% premium over the IPO price of ₹279, signaling robust investor demand.
This first-day surge provided immediate returns of nearly 58% for those who subscribed to the IPO. Even after the initial listing, Mobikwik’s stock continued to rise, reaching an intraday high of ₹506, marking an additional 14.5% increase from its listing price.
This strong entry into the market underscores the growing optimism surrounding Mobikwik’s future prospects in the fintech space.
Mobikwik IPO: Record-Breaking Subscription Numbers
The overwhelming demand for Mobikwik’s IPO speaks volumes about the confidence investors have in the company’s growth story.
The IPO was oversubscribed by an eye-popping 125.69 times by the time subscriptions closed. This level of interest highlights Mobikwik’s appeal, particularly in a fintech sector that has seen rapid growth and transformation in recent years.
Breaking down the subscription data:
- Retail investors: The portion reserved for retail investors was subscribed a staggering 141.78 times.
- Non-Institutional Investors (NII): The NII portion was oversubscribed 114.7 times.
- Qualified Institutional Buyers (QIB): The QIB portion saw a subscription rate of 125.82 times.
The IPO’s price band ranged from ₹265 to ₹279, and it quickly became one of the most eagerly awaited fintech public offerings of the year.
Given the record-breaking subscription rates across all categories, Mobikwik’s IPO has captured the attention of investors both large and small, making it one of the most talked-about stock market events in recent months.
The Size and Use of Funds Raised in the Mobikwik IPO
The total size of Mobikwik’s IPO stood at ₹572 crore, raised entirely through the issuance of fresh shares.
This capital infusion will play a pivotal role in helping the company expand its business and solidify its position in the competitive fintech space.
The company has outlined specific ways in which it plans to deploy the funds:
- ₹150 crore for organic growth of its financial services business: This includes investments in expanding its lending platform, payment services, and other financial products.
- ₹135 crore for expanding payment services: Mobikwik is looking to bolster its payments business, which is the backbone of its operations. With the rapid shift to digital payments, enhancing its payment solutions is crucial to maintaining competitiveness in the industry.
- ₹107 crore for Research and Development (R&D): The company plans to invest heavily in AI, machine learning, and other advanced technologies to improve its product offerings and create new services. R&D investments will help Mobikwik stay ahead of the curve and drive innovation in the rapidly changing fintech landscape.
- ₹70.2 crore for capital expenditure on payment devices: Mobikwik intends to allocate a significant portion of the funds toward purchasing payment devices, further enhancing its capability to serve merchants and consumers alike.
The breakdown of how the funds will be utilized clearly reflects Mobikwik’s intention to drive organic growth, expand its market share in the payments industry, and invest in future-ready technologies.
With digital payment services, Buy Now Pay Later (BNPL), and financial services gaining traction, these investments could position Mobikwik as a significant player in India’s fintech ecosystem for years to come.
Mobikwik’s Growth Trajectory and Financial Performance
Mobikwik’s listing is not just a triumph for its IPO investors, but also a testament to its robust growth trajectory and improved financial performance in recent years.
The company has significantly strengthened its position in the digital payment sector, which has seen explosive growth driven by increasing smartphone penetration, the rise of digital wallets, and government initiatives such as the Digital India campaign.
Notably, Mobikwik became profitable at both the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and PAT (Profit After Tax) levels for the financial year FY24.
This is an important milestone for the company, as it demonstrates the effectiveness of its business model and the scalability of its operations.
In the past few years, Mobikwik’s Gross Merchandise Value (GMV) — which refers to the total value of payments processed via its platform — grew at an impressive annual rate of 45.9%.
In addition to its core payment business, Mobikwik has also experienced significant growth in its MobiKwik ZIP product, its Buy Now Pay Later (BNPL) offering. Between FY22 and FY24, Mobikwik ZIP’s GMV surged at a staggering annual rate of 112.2%.
This growth in the BNPL segment reflects the increasing consumer preference for flexible payment options and the company’s ability to tap into this emerging trend effectively.
What Should Investors Do Now?
After such a successful listing, the natural question for many investors is: should they hold or sell their shares? According to Abhishek Pandya, a research analyst at Stocksbox, investors should consider holding Mobikwik shares for the medium to long term.
He points out that Mobikwik’s profitability at the EBITDA and PAT levels, its strong market position, and its innovative offerings like MobiKwik ZIP provide a compelling case for continued growth.
Pandya also notes that the fintech sector is poised for continued expansion, driven by increasing digitization, a rising middle class, and government-backed initiatives supporting digital transactions.
Mobikwik’s investments in R&D, technology, and payment infrastructure position it well to capitalize on these trends, making it a strong contender in the long run.
Furthermore, Mobikwik’s ability to adapt to changing market dynamics, expand its user base, and develop new financial products will be crucial to its future growth.
If the company continues on its current trajectory, it could deliver substantial returns for investors who choose to hold onto their shares as it grows.
Final Remarks: Mobikwik’s Promising Future
Mobikwik’s IPO debut has been nothing short of spectacular, delivering impressive first-day gains for investors and solidifying the company’s position as a key player in the fintech industry.
With a strong subscription response, a clear plan for utilizing the funds raised, and a track record of solid financial performance, Mobikwik is well-positioned to continue its growth in the years to come.
As the fintech sector evolves, Mobikwik’s focus on payment services, financial products, and technological innovation makes it a promising long-term investment.
For those who participated in the IPO, it could be wise to hold onto their shares, as the company’s prospects for the future remain strong.
With its solid foundation, aggressive expansion plans, and strategic investments in technology, Mobikwik is poised to be a significant player in the Indian digital payment ecosystem, and its IPO success marks just the beginning of what could be a very rewarding journey for its investors.
