MobiKwik's 5.72 billion-rupee ($67.4 million) IPO was snapped up in under an hour on Wednesday as retail investors flooded in, betting on the Indian fintech firm's long-term prospects in a booming online payments market and short-term gains once the stock lists.
By the end of the first day of the three-day bidding window, the retail portion of the IPO was subscribed by 26.8 times. Overall, investors had placed bids for 7.3 times the 11.9 million shares MobiKwik put on sale, with the non-institutional portion subscribed 9 times, exchange data showed.
Millions of Indians pay online for everything from groceries to flight tickets, allowing fintech - or financial technology - firms to serve consumers, including selling them loans, and businesses by running payment gateway solutions, like MobiKwik does.
Paytm, Walmart backed PhonePe, Amazon Pay and Google Pay dominate India's online payments market, whose transaction value is expected to double to 593 trillion rupees in fiscal year 2028–29 from 265 trillion rupees in 2023–24, per PwC.
Backed by India's Bajaj Finance and Abu Dhabi Investment Authority (ADIA), MobiKwik shelved plans to go public in 2021 after Paytm's disappointing debut that year.
MobiKwik's IPO price band of 265-279 rupees per share indicates a $256 million valuation for the company, about 85% lower than its target in 2021.
Investors are rushing into the IPO as the stock is trading at a 50% premium in the unregulated grey market for private shares, which is considered an indicator of listing day gains, said Arun Kejriwal, founder of Kejriwal Research.
"A good listing pop is expected, so people are willing to punt their money. The entire (IPO) money going into the business, the promoter not taking something off the table have all added up."
The stock is likely to start trading on Dec. 18.
A resurgence in Paytm's shares since its IPO and successful listings of other tech companies, such as food delivery platform Swiggy, is boosting sentiment, said Kranthi Bathini, director of equity strategy at WealthMills Securities.
India's IPO market has boomed this year, with over 300 firms raising $17.5 billion so far, more than double of last year, data compiled by LSEG showed.
MobiKwik reported its first-ever profit of 141 million rupees for the year ended March 2024, with revenue jumping 62% to 8.9 billion rupees.
It sold shares worth 2.57 billion rupees to anchor investors, including Norwegian wealth fund Norges and India's HDFC Mutual Fund, on Tuesday.
