Brokerages Assess OnEMI Technology IPO: Pros and Cons for Potential Investors

OnEMI Technology, operating under the brands “Kissht” and “Ring,” is set to debut in the Indian stock market with an IPO valued at INR 926 crore. The company is strategically targeting the mass market, providing credit to underbanked segments with a significant focus on technology-based solutions such as their “Credit QR” codes, enhancing financial inclusion. Backed by former McKinsey executives and Vertex Growth Fund, OnEMI has already scaled its Assets Under Management (AUM) to INR 5,956 crore, with broker sentiment appearing bullish yet cautious. Recommendations across various brokerages suggest a strong interest in the IPO, highlighting the innovative business model and AUM growth as key factors spurring investor enthusiasm.

Grey market sentiment surrounding the OnEMI IPO has been noted to be positive, with early indications of potential listing gains. This aligns with the bullish consensus among analysts, many of whom are advocating for a “subscribe” rating, particularly for long-term investors. Brokerages such as Anand Rathi and BP Equities underscore the company’s strategic pivot into secured lending, which could mitigate some risks associated with their otherwise high percentage of unsecured personal loans. Furthermore, the company’s attractive valuation at a Price-to-Book (P/B) multiple of approximately 1.4x presents a significant valuation gap compared to established competitors in the sector, enhancing the appeal for retail and institutional investors alike.

For Indian investors, the OnEMI IPO offers an intriguing proposition—both as a growth play in the emerging digital lending space and as a potentially lucrative investment opportunity due to its discounted valuation compared to peers. While the appeal is evident, investors are cautioned about the inherent risks associated with unsecured lending and the competitive landscape dominated by larger financial institutions like Bajaj Finance. As the IPO date approaches, it will be essential for investors to weigh the attractive fundamentals—such as a Return on Equity of 17.7% and rapid AUM growth—against the risks, particularly emphasized by more conservative broker assessments. Overall, this IPO marks a significant development in the fintech landscape, appealing to a broad spectrum of investors looking for exposure to innovative lending models in India.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova IPO team.)