look news india
AHMEDABAD: With favorable valuations of shares of fintech-new age companies still not healing from the wounds of burning hands by investing in initial public offering (IPO) of shares in the past, another fintech company One MobiKwik Systems Ltd has now arrived . Capital markets to raise funds from investors.
Before going on a buying frenzy, investors should consider the valuation risks in fintech-new-age companies at that time, the huge losses suffered by investors in fintech-new-age companies and the subsequent raids by capital markets regulator SEBI. Must remember. Account for the valuation risks involved.
One MobiKwik Systems Ltd, a company that provides digital wallet and online payment services, is currently in the capital market to raise Rs 572 crore, but these risks need to be considered before investing in this IPO.
The company itself has shown several risks in its RHP. Intense competition, trade dependence on third parties, security risks, sluggish growth, financial losses are the main ones. A MobiKwik has suffered a loss of Rs 128 crore in FY 2022 and Rs 83.8 crore in FY 2023.
After showing a profit of Rs 14 crore in the financial year 2024, the company has again suffered a loss of Rs 6.6 crore in the quarter ending June 30, 2024. The Company has experienced negative cash flows from its operating business activities in the past and may face a similar situation in the future.
One MobiKwik is currently facing very intense and growing competition in the fintech industry. If the Company fails to respond effectively to this competition, the Company’s business, financial condition, performance and prospects may be adversely affected. The operations of the company are under the regulation and supervision of RBI. Any adverse observation, action or notice by RBI in the operations of the company may impact the operations of the company.
A slowdown in the growth of the Company’s active users could have a negative impact on the Company’s business performance. While rising capital costs may also reduce the attractiveness of digital credit offerings. Apart from this, there is also a danger of interest rates increasing.
Furthermore, security breaches or attacks on the Platform, as well as potential failures to protect personal, confidential and proprietary information, could harm the Company’s reputation and adversely affect its operations and financial health.
Considering the financial position of the company based on the earnings of the year 2024, the price of this issue is currently considered high. Shares of fintech-newz companies have suffered heavy losses in the past and the companies have also faced difficulty in obtaining new funding given favorable valuations. Therefore, it is necessary to beware of the temptation of investors demanding huge premiums in the primary market and inflating the subscriptions.