One Mobikwik Systems IPO Review: Should You Invest?

One Mobikwik Systems Limited, commonly known as MobiKwik, has established itself as a prominent fintech platform in India. Offering a wide range of digital payment and financial services, MobiKwik connects consumers and merchants, creating a two-sided payment network. The company has announced its IPO, drawing significant attention from investors eager to tap into the fintech growth story. Here’s a comprehensive review of the MobiKwik IPO to help you make an informed decision.

About One Mobikwik Systems

Founded: 2008
Managing Director: Mr. Bipin Preet Singh
Parent Organization: One Mobikwik Systems Ltd

MobiKwik operates a digital ecosystem that facilitates payments, credit, investments, and insurance solutions. The company’s key products include:

• Digital Wallets: Enabling utility payments, mobile recharges, and bill payments.
• ZIP and ZIP EMI: Buy now, pay later solutions for consumers.
• Merchant Solutions: Online checkout, Kwik QR, EDC machines, and Merchant Cash Advance.
• Personal Financial Management: Analytics-powered tools for better financial control.

With over 161 million registered users and 32,898 active merchants (as of June 2024), MobiKwik has evolved into a multi-product fintech platform.

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Strengths

1. Growing User Base: Registered users grew at a CAGR of 12.31%, reaching 161.03 million by June 30, 2024.
2. Diverse Product Portfolio: Offers payment solutions, credit products, and financial management tools.
3. Collaborations with Leading Lending Partners: Partnerships with institutions like TVS Credit, Hero Fincorp, and Poonawalla Fincorp bolster its financial services offerings.
4. Innovative Offerings: Products like fixed-deposit-backed credit cards and account aggregator technology showcase its focus on innovation.
5. Revenue Growth: Operational revenue increased from ₹526.56 crore in FY22 to ₹875 crore in FY24.
6. KYC-Completed Users: Over 70.88 million KYC-completed users ensure compliance and enhance trust.

Risks

1. Cybersecurity Threats: Any breach could harm reputation and operations.
2. Dependency on Lending Partners: Significant revenue comes from financial services, making partnerships critical.
3. Operational Losses: Losses in FY22 and FY23 raise concerns about profitability.
4. Debt Obligations: Outstanding debt of ₹206.34 crore as of June 2024 may strain finances.
5. Competition: Faces stiff competition from peers like Paytm and PhonePe in the digital payments space.
6. Legal Challenges: Ongoing cases involving the company and its subsidiary may pose risks.

Objects of the IPO

The funds raised will be utilized for:

• Growth in financial services and payment services businesses
• Investments in technology (data, ML, AI)
• Capital expenditure for payment devices
• General corporate purposes

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Financial Performance

(*Q1 FY25 losses attributed to provisioning adjustments.)

MobiKwik IPO Details

• Registrar: Link Intime India Private Ltd
• Email: mobikwik.ipo@linkintime.co.in
• Phone: +91-22-4918 6270

Analyst Recommendations

One Mobikwik Systems IPO Review

Verdict

MobiKwik’s transformation into a multi-product fintech platform demonstrates strong growth potential. However, the aggressive pricing of the IPO and recent operational losses may raise concerns. Risk-averse investors should approach with caution, while those with a long-term horizon can consider investing for potential growth in India’s digital financial ecosystem.

Disclaimer: This article is for informational purposes only and not financial advice. Consult your financial advisor before making investment decisions.