OnEMI Technology Solutions Rs 926 crore IPO saw 27% subscription on Day 2, with QIBs leading demand. GMP remains modest at 2%, indicating cautious sentiment. While improving profitability and reasonable valuations support the case, high unsecured lending exposure and regulatory risks suggest investors should approach the issue with measured expectations.

OnEMI Technology Solutions IPO Day 2: Subscribed 27% so far, GMP at 2% and other key details

Synopsis

OnEMI Technology Solutions’ Rs 926 crore IPO saw 27% subscription on Day 2, with QIBs leading demand. GMP remains modest at 2%, indicating cautious sentiment. While improving profitability and reasonable valuations support the case, high unsecured lending exposure and regulatory risks suggest investors should approach the issue with measured expectations.

The Rs 926 crore IPO of OnEMI Technology Solutions has been subscribed 27% on the second day of bidding, out of a total issue size of 3.97 crore shares.

Retail investors subscribed to 9% of their allotted 1.99 crore shares, while non-institutional investors (NIIs) showed relatively higher participation at 19% of their quota of 85.36 lakh shares. Qualified institutional buyers (QIBs) led the response, bidding for 66% of their 1.13 crore share allocation.

Overall, the issue has attracted early interest from investors, with a grey market premium (GMP) of about 2%, reflecting cautious yet mildly positive market sentiment.

OnEMI Technology IPO price band, issue size, and timeline

The IPO is priced between Rs 162 and Rs 171 per share, targeting a total fundraising of Rs 926 crore. This comprises a fresh issue worth Rs 850 crore along with an offer for sale (OFS) of Rs 76 crore. The subscription window will remain open until May 5, and the listing is expected in early May.

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OnEMI Technology GMP and estimated listing price

In the grey market, the IPO is trading at a premium of about Rs 3.75 per share over the upper price band of Rs 171. This points to an estimated listing price near Rs 175, reflecting modest expectations of upside.

About the company

OnEMI Technology Solutions runs the digital lending platform Kissht, offering personal and business loans through a fully digital process. It oversees the complete loan lifecycle, from customer onboarding to repayment and collections, earning revenue through interest income and fees charged to lending partners.

The platform has grown substantially, serving over 6.3 crore users. Its data-driven credit assessment model, along with strategic partnerships, has helped expand access to credit, particularly for underserved customer segments.

Financial performance

The company has reported mixed financial trends. Revenue declined to around Rs 1,352 crore in FY25 from Rs 1,700 crore in the previous year. However, profitability improved, with net profit at Rs 160.6 crore.

Margins have strengthened notably, with EBITDA margins rising to nearly 30% from under 10% two years ago.

Use of proceeds

Of the IPO proceeds, Rs 637.50 crore will be used mainly to bolster the capital base of its NBFC subsidiary, Si Creva, enabling it to support future loan expansion. The remaining funds will be allocated towards general corporate purposes.

Valuation and peer comparison

At the upper price band, the company is valued at approximately 10 to 12 times earnings and about 0.9 times book value, which appears relatively discounted compared to larger peers like Bajaj Finance and SBI Cards.

Risks to consider

The business carries notable risks, mainly due to its heavy reliance on unsecured lending, which makes up more than 90% of its loan portfolio. This increases its exposure to credit risk, particularly during periods of economic stress.

In addition, the company’s growth is closely tied to its ability to consistently acquire and retain customers, while regulatory developments in the digital lending sector could also affect operations. Sustained expansion may further depend on ongoing capital support.

Should you subscribe?

Brokerages have adopted a cautious outlook on the IPO. Swastika Investmart has given it a “neutral” rating, pointing to fair valuations but expressing concerns over high unsecured lending exposure and uneven financial performance. It suggests investors wait for clearer signs of stable growth.

Equivision acknowledged the company’s scalable AI-driven platform and relatively strong asset quality, but raised concerns around the durability of growth and associated credit risks.

On the other hand, SBICAP Securities Research highlighted solid financial performance in recent years. Between FY23 and FY25, the company reported a CAGR of 15.8% in net interest income, 29.6% in pre-provision operating profit, and 140.9% in net profit. Margins have remained robust, with net interest margins ranging from 16.8% to 23.8% during the same period. Asset quality also appears stable, with gross NPAs at 2.9% and net NPAs at 0.4% as of December 2025. At Rs 171 per share, the IPO is valued at a post-issue price-to-adjusted book value (P/ABV) multiple of 1.6x, which analysts view as reasonable given the growth outlook, though risks remain.

Overall, while valuations and profitability metrics look encouraging, the high unsecured lending exposure and evolving regulatory environment warrant a cautious approach from investors.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times.)

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