Mobikwik IPO Sees Unprecedented Demand, Oversubscribed 120 Times with Strong Grey Market Premium

The recently concluded IPO of One Mobikwik Systems has made a significant impact, with the issue being oversubscribed nearly 120 times, showcasing overwhelming investor demand. The IPO, which was open for subscription from December 11 to December 13, attracted bids for over 141 million shares against the 1.18 crore shares on offer. The strong demand comes despite the company facing stiff competition in the fintech sector and dealing with various business challenges.

Impressive Subscription Numbers
The Mobikwik IPO garnered attention with an impressive subscription rate of 119.38 times on the final day, making it one of the most sought-after public issues in recent times. For comparison, other major IPOs that concluded last week—Vishal Mega Mart and Sai Life Sciences—were oversubscribed by 27.28 times and 10.27 times, respectively.

Grey Market Premium (GMP) Shows Strong Potential
As per market sources, the grey market premium (GMP) for Mobikwik IPO stands at ₹166. This indicates that Mobikwik’s shares could list at ₹445, representing a 59% premium over the upper price band of ₹279, reflecting a promising debut.

Why Investors Are Bullish on Mobikwik IPO
Several key factors fueled the investor frenzy for Mobikwik’s IPO:

1. Attractive Pricing: The price band of ₹265 to ₹279 per share was considered reasonable. Experts noted that at the upper price band, Mobikwik’s market capitalization to sales ratio for FY24 stood at 2.5 times, which was perceived as a fair valuation for a company in the fast-growing digital transactions segment.
2. Robust Growth Prospects: As a significant player in the mobile wallet and digital lending space, Mobikwik stands to benefit from the growing digital transaction market. With the value of digital transactions expected to grow at a CAGR of nearly 22% from FY24 to FY28, the company is poised for strong future growth, particularly in addressing the underbanked population of India.
3. Strong Recent Financial Performance: Mobikwik’s recent performance also added to the positive sentiment. The company reported profitability at the EBITDA and PAT levels in FY24, with a 29% CAGR in revenue from FY22 to FY24. Its payment GMV grew at a 46% CAGR, while MobiKwik ZIP GMV surged by 112% during the same period.
4. Brand Recognition: Mobikwik has built a strong brand presence across Indian cities, earning consumer trust with its wide range of digital payment offerings. The company’s product, Xtra, has seen significant traction, further cementing its position in the digital payments landscape.

As investors eagerly await the listing of Mobikwik shares on December 18, the strong demand and positive market sentiment indicate that the fintech company is well-positioned for a successful debut.