loader2
Partner With Us NRI

Open Free Demat Account Online with ICICIDIRECT

Factors To Keep In Mind Before Applying For Mobikwik IPO

ICICI Securities 12 Nov 2021 0 COMMENT

INTRODUCTION:

In today’s time, you will find people using digital payments for any online transaction. It could be as simple as paying their phone bill, utility bills, or shopping online through a website. The period of making payments face to face—is a thing of the past. It is fading into yesteryear, replacing it with the era of digital payments. Thus, you no longer need to stand in a queue for hours to pay your phone or light bill. The advent of digital payments indeed has made our lives easy.

WHAT IS MOBIKWIK IPO?

MobiKwik is one of India’s leading digital wallet start-ups. It is a fintech company that primarily provides the benefit of Buy Now Pay Later (BNPL) to its users. The digital payments firm also provides Peer-to-peer payments services through UPI, MobiKwik wallet, and from their wallet to your bank.

On 12th July 2021, Under the name of One Mobikwick Systems Limited, the digital payments company filed a Draft Red herring Prospectus (DHRP) with SEBI for issuance of IPO .

FACTORS TO CONSIDER BEFORE APPLYING FOR MOBIKWICK IPO:

  • Read the DHRP:

Before you apply for IPO, you must always go through the DHRP filed by the company. It is a document that every investor must read to make a well-informed decision. It will help you understand all you need to know about the company. Visit the official website of SEBI at https://www.sebi.gov.in/filings/public-issues/jul-2021/one-mobikwik-systems-limited_51019.html to read their DHRP.

While reading the DHRP of the company, there are certain factors you need to consider to apply IPO. They pertain to the company’s profile, its potential in the market, and past performance. Let us now look at the key factors or things to consider for Mobikwick’s IPO:

  • Know about the Company Profile:

MobiKwik is a fintech company that provides for peer-to-peer service of digital payments. It is a Gurgram-based company founded in 2009 by Bipin Preet Singh and Upasana Taku. It is known for its mobile wallet and Buy Now Pay Later (BNPL) segment. With MobiKwik, you need not worry about carrying money physically wherever you go. All you need to do is link your mobile wallet to your bank account and add money into the mobile wallet to make further payments. It could be to purchase anything, maybe at a store, or make payments towards utility bills. Thus, the app has made the process of payments quick and easy.

With over 101.37 million registered users, the company has become India’s leading digital payment platform. The company also included online merchants in its platform with the introduction of Zaakpay in 2012. It enables online merchants to collect payments from its users using payment options such as—debit, credit, UPI, or net banking.

  • Know about the IPO Offer:

MobiKwik plans to raise ₹ 19,00 crores via its public offering with a 100% book-built offer. Its offer comprises Fresh Shares aggregating up to ₹ 15,00 crores and an Offer For Sale (OFS) up to ₹ 400 crores by selling shares of its existing shareholders.

  • The purpose behind the issuance of IPO:

Knowing the purpose behind the issuance of an IPO is very crucial. It will help you analyze the profit rate of your investment. The future outcome of your investment will depend upon the end-use of your funds by the company.

The object behind Mobkwik’s IPO is to raise funds for business expansion and to undertake business activities. With the help of these funds, the company intends to explore opportunities for its inorganic growth. The company shall utilize the net proceeds towards customer retention and merchant acquisition through various initiatives and ideas. They shall use it to enhance user and merchant experience with new inventions of data products and technology.

  • Company’s Strengths, Industrial growth:

With a quick, reliable way to make payments for its users, the company has witnessed rapid recovery in the second half of the COVID-19 –where there was a need for cashless, contactless payment. The company consists of three segments, namely—

  1. Buy Now Pay Later (BNPL), which includes Mobikwik Zip and Zip EMI for affordable credit;

  2. MobiKwik Wallet for peer-to-peer services and consumer payment;

  3. Zaapkay payment gateway for online merchants and websites.

With its easy to use digital products, the company has over 101.37 million registered users and more than 3.44 million e-commerce, physical retail, and biller partners. The most popular segment is BNPL which focuses on giving affordable credit to middle-class income Indians. In 2018, the company acquired Clearfunds, an online mutual fund platform to offer wealthtech products. It has partnered with 36 asset management companies, including UTI mutual funds .

  • Risk factors involved:

The company may face adverse impacts if there are lower levels of consumption. The company had faced a negative impact during the first half and second half of COVID-19. Offline stores were temporarily closed and, UPI transactions continued only for the essential category of items. That resulted in lower levels of consumption for the company and the onboarding of new merchants on the digital payments platform. The other risk involved could be if the company fails to attract new customers or online merchants, it may face an adverse negative impact. Their ability to grow and retain their existing users also depends on the willingness of people and the launch of their innovative ideas and digital products.

CONCLUSION:

The launch date of Mobikwik IPO is announced as September 2021. You can apply it offline or online. You must consider all aspects of the company as above before applying for its IPO.

Disclaimer

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  Please note, IPO related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.