IPO Review: Mobikwik IPO vs Sai Life Sciences IPO vs Vishal Mega Mart IPO. Which one should you subscribe?

IPO Review: After a quiet period in the primary market, the second week of December appears to be bustling with initial public offerings (IPOs) as five issues are set to open this week. The Mobikwik IPO, Sai Life Sciences IPO, and Vishal Mega Mart IPO have all launched today, Wednesday, December 11. Of these three, the Mobikwik IPO has received an impressive response from retail investors and has been fully subscribed. Following closely is the Sai Life Sciences IPO, with the Vishal Mega Mart IPO lagging behind, as both are yet to be fully booked. Market analysts suggest that investors should consider the Mobikwik IPO and Vishal Mega Mart IPO, followed by the Sai Life Sciences IPO. All the three IPOs will close on Friday, December 13.

The upcoming two IPOs launching this week are Inventurus Knowledge Solutions IPO and International Gemmological Institute IPO.

The IPO of Vishal Mega Mart consists exclusively of an offer for sale (OFS) valued at ₹8,000 crore from Samayat Services LLP, which holds a 96.46 percent stake in the company.

The Mobikwik IPO is entirely made up of a new issuance of equity shares totaling up to ₹572 crore, with no component of OFS.

The Sai Life Sciences IPO includes a combination of a fresh issuance of equity shares amounting to up to ₹950 crore and an OFS of as much as 3.81 crore equity shares from promoters, investor shareholders, and other shareholders.

Here’s what experts say

Arun Kejriwal, the founder of Kejriwal Research and Investment Services, highlighted that all three are completely different businesses. One is a supermart, specialising in affordable aspirational fashion. The second segment is general merchandise, and the third is groceries.

The second business (One Mobikwik Systems) provides you with a platform between buyer and seller of goods and commodities and a facility to buy now and pay later. The third company is Sai Life Sciences, which is into research and drug development and through the life cycle of the drug, it works with the innovator, etc etc. With completely diverse businesses, there’s no way you can compare them. If you look at the prospects of them and then decide what to do, you have one company, which is in the supermart business, which is comparatively smaller than its listed peers of Dmart. Considering the fact that it’s going to grow by spreading its wings in the west and some more density in the existing market. It can be an attractive proposition, considering the fact that this is a business which is picking up catering to the mid and lower segments of society.

If we look at the platform business One Mobikwik Systems the advantage that is it is a platform which is the leading business, it doesn’t deploy any further cash in the business, etc. It’s now matured, and they made money last year and ramping up from here on their progress and profitability. It can ramp up quite fast. That makes it an attractive proposition.

The third business, Sai Life Sciences, is good, but it’s only meant for all the serious long-term players. We don’t seem to have that in our market. Everybody seems to look at short-term and instant profit. The best of the lot appears to be One Mobikwik Systems, followed by Vishal Mega Mart.

Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund ranking for this week’s IPOs is as follows:

1. Vishal Mega Mart: An organized retailer serving Bharat with affordable prices. With 645 stores across 414 cities, it has established a strong growth foundation. The company’s working capital management has been exceptional, considering retail complexities. Valuation-wise, it’s priced lower than both DMart and Trent, indicating potential upside.

2. Mobikwik: I admire Upasana’s journey and the company’s resilience in bouncing back from challenges. The price-to-sales ratio of 2.43x FY24 seems reasonable given the intricacies of the payments business.

3. Sai Life Sciences: While it offers comprehensive services in drug discovery, development, and manufacturing for small molecule NCEs, the sector faces biotech funding and regulatory risks. I’d prefer investing in a larger, more established player like Divi’s Laboratories, which currently trades at a more attractive valuation.

Akriti Mehrotra, a Research Analyst at StoxBox, identifies Vishal Mega Mart as her top selection, followed by Mobikwik and Sai Life Sciences. Mehrotra expresses that the company is well-priced with a P/E ratio of 77.2x, which is lower compared to its retail competitors, and is strategically positioned to take advantage of India’s growing retail market, especially in Tier-2 and Tier-3 cities where organized retail still has low penetration, presenting significant growth opportunities.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.