MobiKwik IPO: GMP Up 40%, Brokerages Positive On Public Issue

Ahead of the opening of the initial public offering (IPO) of fintech major MobiKwik, its shares are trading about 40% higher in the grey market from the upper end of the price band of INR 265 to INR 279, as per reports. 

According to Investor Gain, MobiKwik shares were trading at INR 391 apiece on December 8.

The company’s IPO will open on December 11 and close on December 13. Its shares will list on the NSE and the BSE on December 18. 

The price surge in the grey market may have been driven by the upbeat takes of brokerages on the IPO.

Bajaj Broking recommended investors to subscribe to MobiKwik’s IPO with a long-term perspective. In its IPO note, the brokerage said that MobiKwik plans to diversify its business into other areas and this may help it enhance its revenues in the coming years. 

The company’s move to cut the size of the IPO has also received thumbs up, with Kotak Securities saying that the public issue is an attractive investment opportunity.

“The reduced size of the IPO and specific allocation of funds demonstrate strategic intent… With caution, the IPO could make MobiKwik a trailblazer in determining the path of digital finance,” Kotak said. 

MobiKwik filed its red herring prospectus last week to raise INR 572 Cr. Earlier, it had received market regulator SEBI’s go-ahead to raise INR 700 Cr from its IPO. 

The public issue solely comprises a fresh issue of shares. The company also cut its IPO valuation to around $255 Mn from its valuation of about $1.5 Bn to $1.7 Bn in 2021.

On the valuation cut, MobiKwik founder and CEO Bipin Preet Singh was quoted as saying by Business Standard, “It is disappointing for investors if an IPO with an elevated valuation does not perform following listing. People believe these are bad businesses with a lot of cash burn but somebody has to change that. Even if it means getting a cut in valuation, we are fine with it.” 

Meanwhile, MobiKwik slipped into the red in the first quarter of 2024-25 (Q1 FY25) after turning profitable in FY24. It posted a net loss of INR 6.6 Cr in Q1 FY25 against a net profit of INR 3 Cr in the year-ago quarter. Revenue from operations stood at INR 342.2 Cr during the quarter under review.

In FY24, MobiKwik posted a net profit of INR 14.1 Cr as against a net loss of INR 83.19 Cr in the previous fiscal year. Operating revenue rose 62% to INR 875 Cr from INR 539.5 Cr in FY23.