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MobiKwik's unlisted shares have experienced a significant decline following the disappointing IPO and subsequent market performance of Paytm, impacting investor sentiment and valuation.
Mumbai: The underwhelming market debut and continued struggles of Paytm have cast a shadow over its smaller, unlisted competitor, MobiKwik. According to traders specializing in the unlisted shares market, MobiKwik's stock has suffered a notable setback as a result.
Prior to Paytm's IPO launch earlier this month, MobiKwik's shares were trading at a peak of ₹1,350 apiece. However, the tepid response to Paytm's IPO and its even more lackluster listing triggered a downward spiral for Mobikwik shares. The stock is now trading at ₹900, marking a nearly 33% plunge from its peak.
A MobiKwik spokesperson stated, "As per company policy, we don’t respond to any market speculation. MobiKwik has got regulatory approvals for its IPO and will go public at an appropriate time."
One97 Communications Ltd, Paytm's parent company, witnessed its shares plummet 27% on their market debut, and they have since fallen 36.37% below their IPO price of ₹2,150. This sharp sell-off has erased ₹51,194 crore from investor wealth based on the IPO valuation of ₹1.39 trillion.
Manan Doshi, co-founder of UnlistedArena.com, noted, "The discouraging response to fintech IPOs of Paytm and Fino Payments Bank triggered the downfall, which got accelerated by the disastrous listing of Paytm." Paytm's ₹18,300 crore IPO, the largest in India to date, was only subscribed 1.89 times, while Fino Payments Bank's public offering was subscribed two times. Fino's shares are currently down 31% from their IPO price of ₹577.
One Mobikwik Systems Ltd filed its draft papers in July and received Sebi’s nod in October. Its IPO will comprise a sale of new shares worth ₹1,500 crore and an offer for sale of stock worth ₹400 crore by its founders and shareholders. The company's revenue dropped 19% to ₹288 crore in FY21 from ₹357 crore in the previous year, while net loss widened to ₹111 crore from ₹100 crore during the period.
Analysts suggest that the primary market sentiment has soured following Paytm's weak listing, potentially impacting upcoming share sales by startups. The grey market premium for Latent View Analytics, Tarsons Products, and Go Fashion has also experienced a decline. Aditya Kondawar, COO of JST Investments, believes this may lead to a cooling-down of the euphoria in the IPO markets.
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