MobiKwik Share Price Delivers Over 120% Returns From IPO Price Within 7 Days Since Listing; BUY Or Not?

The shares of One MobiKwik Systems Limited have been on an uptrend since their debut on the stock exchanges. Listed on December 18, 2024, at a hefty premium of nearly 58%, the stock has continued to deliver strong gains. As of the last trading session on Friday, MobiKwik's share price closed at Rs 622.95 on the NSE, translating to a 120% return for investors.

MobiKwik's Rally
Stock market experts attribute MobiKwik's rise to its strong financial performance and strategic business model. According to Abhishek Pandya, a Research Analyst at StoxBox, the digital payments and financial services company has carved a niche in a competitive market. As of FY24, MobiKwik ranks third in registered wallet users, boasting a user base of 135.41 million.

Pandya highlighted that the company achieved profitability at both EBITDA and PAT levels in FY24. The EBITDA margin improved from a negative 21.24% in FY22 to a positive 4.18% in FY24. Simultaneously, the Profit After Tax (PAT) stood at Rs 14.1 crore.

MobiKwik's business strategy, which focuses on wallet services and small-ticket consumer lending, has been a key driver of its success. The company offers loans ranging from Rs 1,000 to Rs 2,00,000, backed by stringent filtration checks.

What Lies Ahead?
MobiKwik shares are being hailed as a "buy-on-dip" stock by market experts. The stock has established a strong support base at Rs 590, making it an attractive option for investors looking for medium to long-term gains. Analysts predict a near-term target of Rs 700, provided the support level remains intact.

Pandya expressed optimism about the company's future, citing favourable trends in India's digital payments landscape. "With consistently improving operating performance and strategic business shifts, MobiKwik is well-positioned to deliver robust revenue, EBITDA, and PAT growth in the upcoming quarters," he said.

IPO Journey
MobiKwik IPO, priced in the range of Rs 265 to Rs 279 per share, opened for subscription from December 11 to December 13, 2024. The issue received an overwhelming response from investors, culminating in a strong listing on December 18.

On the BSE, the shares were listed at Rs 442.25, while the NSE saw the listing price at Rs 440 per share. This debut set the tone for the stock's subsequent rally.

Why Investors Are Bullish?
The company's growth story is supported by its approach to digital payments and consumer lending, which resonates with India's fintech market. The shift towards digital financial services, coupled with MobiKwik's profitability and expanding user base, makes it more attractive.

Experts also point to the company's ability to sustain growth in a competitive environment. By balancing its wallet services with small-ticket lending, MobiKwik has created a diversified revenue stream that mitigates risks and enhances profitability.

*Inputs from Mint*