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Industry : Finance/NBFC

One Mobikwik Systems Limited View all IPOs

Price Band

Rs 265 – Rs 279

One Mobikwik Systems Limited is going public with a fresh issue and an offer for sale. The issue opens on 11th December 2024.

MOJO CALL

Why

MOJO CALL

Avoid

Neutral

High synergies between businesses

The company operates across two main segments: financial services and payment services. It provides an extensive suite of offerings, including investment products, insurance, digital credit, and other services for payment customers. Furthermore, it offers payment gateway services and digital credit solutions to its merchant clientele, enabling increased monetization per customer.

High growth in both businesses

The company is capitalizing on the strong network effects and cross-selling opportunities generated by the synergies between its two business segments, driving significant growth. It earns a commission on the total GMV in its payments and financial services operations. Over the past two years, the company has increased its payments GMV by 87%, while disbursements in the financial services segment have surged by 500%.

Highly competitive industry

The company operates in an intensely competitive market dominated by established players like Google Pay, PayTM, and PhonePe, which have acquired a . Over the last three years, the company's customer acquisition costs have surged by 91% due to increased efforts to expand its customer base.

Valuations

Based on the FY2024 financials, the company is asking for a P/E ratio of 163x and a market cap-to-sales ratio of 2.6x. Currently in a high-growth phase, the company benefits from strong synergies between its business segments, which are fueling its growth. As a result, we recommend subscribing to the issue.

Issue Details

Issue Opens	11th December 2024
Issue Closes	13th December 2024
Price Band	Rs 265 – Rs 279
Issue size (Upper Band)	Rs. 572 Cr
Issue Type	FRESH ISSUE
Market cap (based on upper band)	Rs. 2295.45 Cr
Sales- March 2024 (Rs./Crs)	875 Cr
Net Profit - March 2024 (Rs./Crs)	14.08 Cr
Industry	Finance/NBFC
Promoters	BIPIN PREET SINGH, UPASANA RUPKRISHAN TAKU, KOSHUR FAMILY TRUST AND NARINDER SINGH FAMILY TRUST
Lead Manager	SBI Capital and DAM Capital

Objective of the Issue

Details

Objectives of the Issue Fresh Issue – Rs 572 cr

The Objectives of the Offer are for:
1. Funding organic growth in the financial services business – Rs 150 crore
2. Funding organic growth in the payment services business – Rs 135 crore
3. Research and development in data, ML and AI and product and technology – Rs 107 crore
4. Capital expenditure for our payment devices business – Rs 70.28 crore
5. General Corporate Purpose – 109.72

List of Shareholders Selling Their Stake

Name	Type	Value of Shares (in Rs)	% of OFS
-	-	-	-

Business Operations

About Company

One Mobikwik Systems is a fintech player operating a platform to enable payments for customers and merchants. The company has expanded its product portfolio by offering digital credit solutions, investment avenues and insurance.

As of 30th June 2024, the company had over 161.03 million registered users on its platform, out of which 70.88 million users are KYC approved.

The company offers payment services such as UPI, recharge and bill payment, credit card bill payment, and merchant payment services.

Under financial services, the company offers digital credit services such as a 30-day credit line and short duration personal loans. The company also offers investment products such as Mutual Funds and digital gold, Fixed deposits with registered banks and NBFCs, and P2P lending.

Segment Revenue Breakup

Revenue Breakdown by Segment:
Segment	Q1 FY2025	FY2024	FY2023	FY2022
Payment Services	50%	36%	47%	82%
Financial Services	50%	64%	53%	18%

Financials

Financial Overview

The company’s revenue grew by 66% between FY2022 and FY2024 and stood at Rs 875 crore for FY2024. For Q1FY2025, the revenues stood at Rs 342 crore.

In FY2024, the company’s Return on Net Worth stood at 8.66%, up from (58.74%) and (59.19%) recorded in FY2023 and FY2022, respectively.

For Q1 FY2025, operating margins for the company stood at 0.64%, down from 4.18% recorded in FY2024 but up from (9.97%) recorded in FY2023.

Consequently, profit margins for Q1 FY2025 stood at (1.9%), down from 1.6% recorded in FY2024 but up from (15.53%) recorded in FY2023.

The company has not been able to generate positive cash flow from operations for the previous year. The company reported a CFO of Rs (22) crore in FY2024. For Q1 FY2025, company generated a CFO of Rs 13.5 crore.

As of 30th June 2024, the company had debt (incl. lease liabilities) of Rs 218.6 crore.

Financial Performance (Rs/crore)

Rs./Crs	Q1FY 25	FY 24	FY 23	FY 22
Revenue	342.27	875.00	539.47	526.57
Net Profit	-6.62	14.08	-83.81	-128.16