Mobikwik share price soars 90% on debut day. Should you stay invested or book listing gains?

Mobikwik share price witnessed a strong stock market debut on Wednesday, December 18, defying weak market sentiment and surpassing grey market expectations for its listing price. With an impressive subscription rate of over 119 times, the Mobikwik IPO garnered significant attention from investors.

Mobikwik share price opened at ₹442.25 on the BSE, up 58.5 per cent compared to the issue price of ₹279. The stock, however, surged to the level of ₹530.70 during the session, rising over 90 per cent from its issue price. Finally, the stock closed at ₹530.30, up 90.07 per cent against its issue price. According to market sources, in the grey market, the stock was trading at a premium of 57 per cent on Wednesday morning.

Meanwhile, the Sensex closed 0.62 per cent down at 80,182.20 on Wednesday. 

Most experts gave a subscribe rating to Mobikwik IPO, given the company’s growth prospects, attractive IPO valuation, and market share.

Should you stay invested or book profits?

Experts appear bullish on Mobikwik stock for the long term as they believe the company has ample scope for growth despite fierce competition.

“The competition is there but India’s huge population offers ample scope for rapid growth of Mobikwik. The stock is a buy for the long term,” said Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities.

“This is the era of new-age fintech companies. On the valuation front, post-issue, the stock trades around 9.81 times its book value. The company has the fourth-highest user base in India. As of May 2024, it had about 23 per cent market share. The company is focussing on expanding its core business,” Srivastava observed.

Abhishek Pandya, a research analyst at StoxBox, also highlighted the strength of Mobikwik.

Pandya underscored that Mobikwik ranked third on the registered number of wallet users, which amounts to 135.41 million users as of FY24. Digital payments are on a growth trajectory. The value of digital transactions stood at $30 trillion in FY24, growing at a CAGR of 19 per cent between FY21 and FY24.

Further, Pandya added that the company’s total income stood at ₹3,458.29 million, demonstrating a CAGR of 28 per cent from FY22 to FY24. PAT stood at ₹140.79 million, and the EBITDA margin improved from (21.24 per cent) in FY22 to 4.18 per cent in FY24. The company became profitable at the EBITDA and PAT levels in FY24.

The company’s payment GMV grew at an annual rate of 45.9 per cent, and MobiKwik ZIP GMV (disbursements) grew at an annual rate of 112.2 per cent between FY22 and FY24, Pandya pointed out.

“Given the company’s strong market presence, improved financial performance, and industry tailwinds, we recommend that investors who have been allotted shares consider holding their positions from a medium to long-term perspective,” said Pandya.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.