One MobiKwik Systems IPO Launched: Brokerages Advise Subscribing—Here's Why

Brokerages recommend subscribing to the initial public offering of One MobiKwik Systems as they they are positive on the company's outlook and its valuation against peers.

The IPO of One MobiKwik Systems got fully subscribed within an hour of opening of the issue on Wednesday.

A Geojit report said that at the upper price band of Rs 279, MobiKwik is available at mcap/sales of 2.5 times (on FY24 financials), which appears to be reasonably priced. "We assign a “Subscribe” rating for the issue on a long-term basis, considering its strong brand recall, diversified offerings, rapid scaling, consistent innovation, customer stickiness and promising industry outlook," it said.

In comparison to its peers like PhonePe, Paytm, and PayPal, MobiKwik significantly lags in registered user base and diversified service offerings. "While the company has carved out a niche in ZIP and ZIP EMI offerings, with a growing Financial Services vertical and a low CAC/user, the company is poised to build and attract a bigger pie," says Deven Choksey Research. "The post issue Price to Sales of 2.5 times seems reasonable compared to it’s peers."

"The management attributes the Q1 loss to interest provisioning and other expenses incurred due to pre-funding operations in accordance with accounting standards," according to Bajaj Broking. It said that the company expects that diversification into other areas, with proper registration and licensing from regulators such as the RBI, IRDA, and SEBI, will enhance its revenue and profit in the coming years.