MobiKwik’s Unlisted Shares Subdued Amid Weak Investor Sentiments

The unlisted share prices of MobiKwik continue to remain subdued and have been trading on a flat note over the past one week around INR 875 – INR 900.

Last week they were in the range of INR 880 – INR 900, traders said.

The prices have however come down 7-8% from INR 950 – INR 970 per share two weeks back.

“Even at low prices, buyers are not coming in and trading volumes are low. The weak listing of Paytm severely impacted the sentiments for MobiKwik’s unlisted shares. It has failed to recover from it so far,” said Manan Doshi, cofounder of Unlisted Arena. 

Analysts said that the delay in its proposed initial public offering (IPO) due to lean valuations and lagging investor interest also has impacted the market sentiments.

Last month, The Morning Context had reported that two institutional investors, Eastspring Investments and Nomura, who had committed to invest in the startup’s IPO, have pulled back.

Citing people in the know of the developments, it reported that along with high valuations, the investors are also doubtful about the company’s ability to compete in India’s crowded fintech space.

In response to a query from Inc42, MobiKwik had said in a statement that it “will list at the right time”.

The fear of a subdued IPO and weak listing has gained momentum after the poor response to the Paytm offer, wherein the latter was listed at a discount of over 9%.

Market experts are of the view that this weak response is likely to impact the investor sentiments in the short term and more importantly, make companies and investment bankers conservative in terms of valuations going ahead.

Doshi of Unlisted Arena said that the market would monitor how the company moves ahead with its IPO plans.

The share prices have been declining post surging to INR 1,300 INR – INR 1,350 after it achieved unicorn status in October. Its valuation crossed the $1 Bn mark after a few employees exercised employee stock option plans (ESOPs).

Sandeep Ginodia, CEO of Altius Investech noted that the outlook for the unlisted share prices is currently weak.

INR 1,900 Cr IPO

MobiKwik’s offer will consist of a fresh issue worth up to INR 1,500 Cr and an offer for sale from its existing shareholders worth up to INR 400 Cr.

Its offer of sale (OFS) includes the sale of shares worth INR 9.9 Cr by American Express, INR 68.9 Cr from Bajaj Finance, INR 11 Cr by Cisco Systems, INR 94 Cr by Sequoia, INR 24 Cr by Treeline Asia, INR 111 Cr from founders (promoters) such as Bipin Preet Singh and INR 78 Cr from Upasana Taku.

According to its DRHP, Mobikwik’s revenue from operations fell by 18.7% to INR 288.5 Cr in FY21 from INR 355.6 Cr in the previous year (FY20). The company posted a total income of INR 302 Cr in FY21, a drop of 18% from INR 369 Cr recorded in FY20.

Founded in 2009 by Bipin Preet Singh and his wife Upasana Taku, MobiKwik started as a digital wallet but gradually evolved into a horizontal fintech platform that now offers services such as credit, insurance, and gold loans, among others.