One Mobikwik Systems Limited IPO: Check IPO Date, Lot Size, Price & Details

Introduction:

One MobiKwik Systems Limited (MobiKwik) is an Indian fintech platform business founded in 2008. It operates a two-sided payments network that connects consumers and merchants, offering services like bill payments, money transfers, and merchant payments through its app, as well as via UPI, cards, and its own "ZIP" products.

The company has evolved to provide a range of financial services, including credit products like MobiKwik ZIP (pay-later) and ZIP EMI (personal loans), along with merchant loans, fixed deposits, insurance, mutual funds, and digital gold. It also enables personal financial management through "Lens/Lens.ai". The company’s mission is to drive financial inclusion in India by providing convenient and accessible financial products, particularly targeting consumers and merchants who are underserved by traditional financial institutions.

The company has grown significantly since its inception, and as of June 30, 2024, it had 161.03 million registered users and 4.26 million enabled merchants. It is looking to expand its product offerings and reach a wider consumer base, aiming to solidify its position as a major player in the Indian fintech market. According to the RedSeer Report, as of Fiscal 2023, our Company had the fourth highest user base in India in terms of total registered users on the platform.

IPO Details:

Objects of Issue:

• Funding organic growth in our financial services & payment services business.
• Research and development in data, ML and AI, as well as in product and technology.
• Capital expenditure for payment devices business.

Key Strengths:

Low customer acquisition cost (CAC): MobiKwik has been able to achieve a low CAC per new registered user, ₹32.87 in fiscal year 2024 and ₹33.53 in the three months ended June 30, 2024, due to its focus on creating products that provide value to consumers and meet their needs.

Focus on technology: The company prioritizes technology in its products, enabling it to offer innovative and user-friendly services, leading to organic customer acquisition and retention.

Marketing and publicity: The sources note that marketing and advertising are among the factors contributing to MobiKwik's success in acquiring customers. These factors have helped the company to build a large customer base and establish itself as a prominent player in the Indian fintech market.

Customer focus: The company’s lending strategy focuses on serving middle-income individuals in India, particularly those underserved by traditional financial institutions. This segment is referred to as "middle India population" in the sources

Risks:

Regulatory scrutiny: MobiKwik's operations are subject to oversight by the Reserve Bank of India (RBI), and any adverse observations or proceedings from the RBI could negatively impact its operations. For example, the RBI has previously highlighted instances where the company was not in compliance with regulations relating to know-your-customer (KYC) procedures and maintaining the required net worth.

Security breaches: Given the large volume of personal and financial data that MobiKwik handles, the company is vulnerable to security breaches and cyberattacks, which could damage its reputation and financial performance. The sources detail various types of cyberattacks, such as phishing, data theft, and ransomware, and note that it has already faced incidents of unauthorized access to its data.

Intense competition: The Indian fintech market is highly competitive, with established players like PhonePe and Paytm, along with traditional banks and NBFCs, vying for market share. It faces challenges in differentiating itself from competitors who have larger consumer bases, greater brand recognition, and more extensive resources.

Reliance on lending partners: MobiKwik's financial services business, particularly its credit products like ZIP and ZIP EMI, is dependent on partnerships with lending institutions. Any failure to maintain or expand these partnerships, or changes in credit market dynamics, could hinder MobiKwik's growth and profitability.

Financial Snapshot:

Conclusion:

The Indian fintech industry is poised for robust growth, fueled by favorable demographics, increasing smartphone penetration, and rising internet adoption. Digital credit, a key segment, offers significant opportunities due to the challenges faced by India’s large middle-income population in accessing traditional credit. However, the competitive landscape, with several established players, poses a significant challenge for MobiKwik. Additionally, while the company has recently achieved profitability, sustaining consistent profits remains critical.

Considering the industry’s growth potential and MobiKwik’s financial performance, we suggest our investors subscribe to this IPO, for potential listing gains.