Mobikwik shares surge nearly 8% today; here's what drove the strong upmove

Shares of One Mobikwik Systems, the parent of Mobikwik, surged in Tuesday's afternoon trade after the digital wallet platform secured an in-principle approval for its payment aggregator - physical (PA-P) license from the Reserve Bank of India (RBI). The stock climbed 7.50 per cent to hit a day high of Rs 205.60. It was last seen trading 5.28 per cent up at Rs 201.26. At this level, it has declined 15.33 per cent over the last six months.

Mobikwik informed bourses that the nod enables the company to deepen its offline merchant payments business across India.

"One MobiKwik Systems Ltd. (MobiKwik) (NSE: MOBIKWIK / BSE: 544305), today announced that it has received an in-principle approval for its Payment Aggregator - Physical (PA-P) license from the Reserve Bank of India (RBI), enabling the Company to deepen its offline merchant payments business across India. The approval marks an important milestone in MobiKwik’s evolution as a full-stack fintech platform serving consumers and merchants through payments and financial services," it stated in a BSE filing.

"MobiKwik already supports a network of 4.9 million merchants through offerings such as UPI QR, Soundbox and EDC machines. The Company has identified small businesses, oil & gas outlets, and organised retail as its three strategic focus segments over the next 18-24 months, with an ambition to materially expand its market share across each," the firm added.

MobiKwik aims to significantly ramp up Soundbox and EDC deployments to meet its stated goal of 10x growth in merchant business by FY28.

"Offline merchant payments represent a large and under-penetrated opportunity in India, with industry estimates pegging the merchant payments GMV opportunity at $1.8-2 trillion by FY28 (Source: Redseer). Unlike consumer payments that largely operate on zero-MDR rails, offline acquiring offers stronger MDR opportunity, subscription and device rental economics, while also facing relatively lower competitive intensity," it also said.

MobiKwik believes that this business creates long-term monetisation opportunities through merchant engagement and utilising transaction data to enable merchant credit distribution.

Bipin Preet Singh, Co-founder, MD & CEO, said: "Offline merchant payments are emerging as one of the strongest growth drivers within India's digital economy, particularly across under-penetrated markets beyond urban India. This PA-P approval strengthens our ability to scale merchant payments infrastructure across the country and sets us up for 10x growth in merchant business by FY28."

Prior to this, the group mentioned that it had also received the payment aggregator - online (PA-O) license through its subsidiary Zaakpay approximately a year ago, strengthening its omnichannel merchant payments capabilities across both online and offline commerce.

According to the exchange filing, MobiKwik said it is India's largest digital wallet, offering a wide range of payment and financial products.