OnEMI Technology IPO: Is it a good long-term bet or should you wait?

The IPO market is buzzing again, and this time it’s OnEMI Technology Solutions, the company behind the digital lending platform Kissht. But for investors looking beyond listing-day gains, the real question is simple: does this offer long-term value or is it better to wait and watch?

The company plans to raise Rs 850 crore through a fresh issue, mainly to strengthen the capital base of its lending arm, along with Rs 75.9 crore via an offer for sale. Post listing, promoter holding will fall from 35.2% to 24.8%.

A FAST-GROWING DIGITAL LENDER

Founded in 2016, OnEMI operates in the fast-growing digital lending space. It offers personal loans and loans against property with quick approvals and minimal paperwork—something that has clearly clicked with young borrowers.

As of December 2025, the company had over 28.7 lakh active customers and assets under management (AUM) of Rs 59,557 crore. Its typical customer is relatively young, with an average age of 32, and a decent credit profile, reflected in a median CIBIL score of 746.

A large share of its users, around 68%, earn between Rs 25,000 and Rs 75,000 a month, showing its strong focus on the salaried middle-income segment.

STRONG GROWTH NUMBERS

OnEMI’s financial growth has been impressive. Its AUM has grown at a sharp pace, rising 80% annually to Rs 4,086 crore between FY23 and FY25. Net profit has also jumped 141% to Rs 160.6 crore.

Margins have improved as well. The net interest margin stood at 21% as of December 2025, up from 18.6% in FY23, indicating better profitability in its lending business.

These numbers show that the company has been scaling up quickly in a competitive market.

RISKS THAT INVESTORS SHOULD NOT IGNORE

Despite the growth, there are a few concerns that stand out.

One key risk is asset quality. The company’s gross non-performing assets (NPAs) are around 3%, which is relatively high for a lender focused on unsecured loans.

Another major issue is its heavy dependence on personal loans. Nearly 94% of its AUM comes from unsecured lending, which typically carries higher risk, especially during economic slowdowns.

There is also a shift in customer mix. The share of AUM from repeat customers has dropped to 50.6% as of December 2025 from 87% in FY23, suggesting the company is becoming more cautious but also relying more on new customer acquisition.

VALUATION AND PEER COMPARISON

OnEMI is valued at a price-to-book (P/B) ratio of 1.4 after the IPO. While it does not have direct listed peers, similar lending-focused companies offer some comparison.

Aye Finance trades around 1.3 times book value, while MAS Financial Services, SBFC Finance, and Fedbank Financial Services trade at higher multiples of 2.1, 3, and 1.9 respectively.

This places OnEMI somewhere in the middle in terms of valuation, neither too expensive nor clearly cheap.

WHAT ABOUT LISTING GAINS?

The grey market premium (GMP) for the IPO is currently around Rs 3.5. Based on the upper price band of Rs 171, the estimated listing price comes to about Rs 174.5, indicating a modest potential gain of just over 2%.

This suggests that expectations for strong listing gains are limited at the moment.

SHOULD LONG-TERM INVESTORS CONSIDER IT?

OnEMI’s story reflects both promise and caution. On one hand, it operates in a growing segment, has scaled up quickly, and shows improving profitability. On the other hand, risks around asset quality and heavy reliance on unsecured loans cannot be ignored.

For long-term investors, the safer approach may be to watch how the company performs after listing—especially how it manages credit risk and stabilises its financials.

For now, it appears less like a clear long-term bet and more like a “wait and watch” opportunity.

- Ends