Mar 30, 2025

SHARE SUMMARY Having peaked in the first week after its IPO, MobiKwik has been on a slide for the past three-plus months Paytm went through the fire soon after its listing, and now it’s MobiKwik’s turn. The Gurugram-based fintech company has seen a rough few months after listing. Having peaked in the first week after its IPO, MobiKwik has been on a slide for the past three-plus months. It has indeed been painful for those who have been holding MobiKwik since its listing. The stock hit a peak of INR 698.30 on December 26, 2024, but since then it has lost over 56% value and is currently trading at INR 304.85 as of Friday, March 28, 2025. This quarter of pain for the stock has coincided with higher-than-expected losses for the December quarter. Revenue from the lucrative lending business fell in the quarter (over 50% YoY) as the distribution model saw a slowdown. Besides this, the company brought in a default loss guarantee in its contracts with RBI-backed lenders to ensure higher commission on each loan disbursed, but this requires allocation from the capital reserves. This higher expense pushed MobiKwik to INR 55 Cr in Q3 FY25, a sharp turn from the profitable end to FY24. And since the December quarter MobiKwik has put all its energy into the diversification push. The big measures are a new investments and wealthtech platform along with a push towards insurance broking. These are also steps that bring MobiKwik closer to the super app model that’s basically the only strategy on offer for many payments apps in light of the extant zero MDR rules for UPI payments. MobiKwik Dives Into New Revenue Streams MobiKwik currently offers digital payment offerings such as Pocket UPI where users can make UPI payments directly with the platform’s digital wallet. It also offers other financial services such as micro lending and investments in mutual funds. It’s interesting to note that despite a dip in lending revenue and GMV, MobiKwik’s overall revenue from operations jumped nearly 18% YoY to INR 269.47 Cr. So the company has clearly seen credible growth in the past year. Cofounder and CFO Upasana Taku said the focus going forward is on balancing the lending portfolio by adding new products, some of which would be secured loans which typically have lower commissions, but are getting increasingly popular among retail mutual fund investors. Taku also claimed the losses in Q3 are a result of the DLG contracts , but the slowdown in disbursals in the previous quarter — thanks to a shrinkage in small ticket size loans — is ominous to some degree. RECOMMENDED FOR yOU 29th March, 2025 In light of this, the launch of a new wealthtech platform and insurance broking is critical for MobiKwik to regain momentum on the revenue side and in the stock market. This past week, MobiKwik entered the investment tech space by incorporating a wholly owned subsidiary Mobikwik Securities Broking. Under this, it will deal in shares, stocks, securities, debt instruments, commodities, currencies and their derivatives, and take on the likes of Groww, Zerodha, Paytm Money, Angel One and others in the wealth tech space. In February, it acquired a stake worth INR 1.5 Cr in B2B banking infrastructure company Blostem Fintech to expand on fixed deposit (FD) aggregation, which is likely to be a part of the wealthtech platform in the future. It’s No Easy Path But competing with these giants will not be a cakewalk, and even though MobiKwik claims to be going at it in a frugal manner, bigger rivals have already bemoaned some shrinkage in volume since late last year when SEBI brought in new rules to curb the market frenzy. India added 1.52 Cr active investors in 2024, with over 65 % or around 1 Cr coming from Groww, Angel One and Zerodha. Groww reported INR 535 Cr in profits in FY24, and Zerodha’s net profits touched INR 4,700 Cr in the year. However, for the first time in a year, the number of registered users on these platforms declined in February 2025, Despite this Groww boasted 1.3 Cr active investors in February and Zerodha had 79.6 Lakh. Market observers believe the slowdown is largely due to the changes in futures and options trading, and it is expected to reflect in lower revenue for both these platforms in FY25. Today, MobiKwik has a base of over 17.2 Cr users, but converting them to start investing through MobiKwik will not be easy. It will also have to fight off other new-age tech startups like PhonePe’s Share.Market, Upstox, Dhan, INDMoney, Lemonn and BharatPe . Besides the hefty competition, MobiKwik has to deal with the typical pains of a newly listed company. For instance, the company reported that a former employee defrauded the business to the tune of INR 1.26 Cr by fudging merchant details between August 2023 and September 2024. MobiKwik told the exchanges that it has implemented a slew of measures to fortify the KYC of merchants and restrict edit access to merchant details. It’s small things like these that do matter at the end of the day. Within fintech, and particularly in payments and lending, compliance and controls are paramount, and without these, even super app dreams can come crashing down. As Paytm can testify, rushing into new verticals is not always the answer. MobiKwik may not claim to be a super app, but that’s the direction it is heading in, with some fintech giants for company and others as cautionary tales. Stock In Focus: Eternal aka Zomato Among the quarter-long decline for Indian new-age tech stocks, Eternal’s (formerly Zomato) pains have been somewhat masked by its massive rally in the year gone by. But even the Deepinder Goyal-led company is feeling the heat. For the first time in six months, Eternal’s stock fell under the INR 200 mark, before settling just above. Incidentally, global brokerage firm BofA Securities downgraded ratings for Eternal and Swiggy, citing concerns over profitability. BofA expects losses to rise for the quick commerce verticals for both giants in particular till the end of FY26, and potentially beyond. It further believes that new entrants in the QC segment will further push incumbents towards higher losses in the near term on the back of platform-led discounts and higher marketing expenses. The Zomato stock actually looked on course to have a good week after the Monday and Tuesday sessions. But it tumbled sharply after the report on March 26, indicating that at least some long-term investors looked to cash in on the 66% gains between March and December 2024, as Hong Kong-based Kadensa did this week . Other new-age tech stocks suffered too this week, with 22 out of the 35 companies in Inc42’s coverage seeing a red week. Yatra, Awfis and Menhood were the biggest gainers in the week, gaining by 9.54%, 6.81% and 6.25% respectively. 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