Whalesbook
Kissht's ₹926 Crore IPO Details
OnEMI Technology Solutions, the company behind the digital lending platform Kissht, has begun its ₹926 crore Initial Public Offering (IPO). The shares are offered at a price band of ₹162-171. The IPO includes a fresh issue of ₹850 crore and an offer-for-sale by existing shareholders. This move aims to raise capital as investor sentiment for tech companies evolves. OnEMI has already secured ₹277.7 crore from anchor investors at the higher end of the price range, indicating some institutional backing. A substantial portion of the IPO funds is allocated to its subsidiary, Si Creva Capital Services, signaling a focus on bolstering the subsidiary's capital rather than broad expansion at the parent level.
Subsidiary Si Creva: Growth Driver, Key Risk
Kissht's strategy heavily relies on its wholly-owned subsidiary, Si Creva Capital Services, a Non-Banking Financial Company (NBFC). Si Creva manages the on-book loans, handling disbursements, customer verification (KYC), and loan collections. The IPO aims to inject approximately ₹637.50 crore into Si Creva to strengthen its capital base, crucial for OnEMI's lending operations. This "asset-light" model allows OnEMI to earn sourcing and servicing fees while Si Creva assumes direct balance sheet risk. While scalable, this structure concentrates operational and financial risks within the subsidiary. Si Creva has faced profitability challenges, notably during the COVID-19 pandemic, making its performance central to the group's loan book growth.
Serving India's Mass Market: Credit Risks
Kissht targets India's "aspirational mass market," a segment characterized by growing digital access and limited credit options. This large market presents a significant opportunity but also considerable credit risks. OnEMI's loan portfolio is predominantly unsecured, with unsecured loans making up between 94.23% and 98.15% of its Assets Under Management (AUM) as of December 2025 and March 2025 respectively. This concentration in unsecured lending is a key risk, as new retail bad loans are increasingly stemming from such portfolios. The Reserve Bank of India (RBI) has warned of potential increases in bad loans, particularly from unsecured retail lending, projecting higher gross bad-loan ratios for banks. OnEMI's own gross non-performing assets (GNPA) stood at 2.9% and net non-performing assets (NNPA) at 0.4% as of December 2025, requiring careful review given the segment's volatility.
New RBI Rules for Digital Lenders
The digital lending landscape in India is undergoing significant regulatory changes. New RBI guidelines, effective early 2026, will require greater transparency and direct fund flows between borrowers and licensed financial firms (Regulated Entities or REs), even when they use third-party partners. Mandatory two-factor authentication for all digital transactions starting April 2026 will add another compliance layer. The recent reintroduction of the Default Loss Guarantee (DLG) framework in February 2026 aims to support fintech-NBFC partnerships but imposes strict conditions on risk assessment and transparency. These regulatory shifts demand robust compliance systems and could increase operational expenses, affecting profitability.
IPO Valuation and Market Sentiment
The IPO is priced at a post-issue Price-to-Adjusted Book Value (P/ABV) multiple of 1.6 times at the upper price band of ₹171. This valuation appears conservative compared to some earlier fintech IPOs, which often commanded much higher Price-to-Sales or Price-to-Earnings multiples. However, market sentiment for tech IPOs has shifted, with investors now prioritizing profitability and solid financial performance over rapid growth. While Kissht showed strong profit growth averaging 140.9% annually between FY23 and FY25, recent reports indicate operating revenue declined by 20% and profit by 19% in FY25 compared to FY24. This downturn, coupled with negative cash flow from operations in recent periods, warrants a cautious assessment of the IPO's valuation amid changing market expectations.
Key Challenges: Execution and Profitability
The IPO presents a profile with significant risks alongside potential rewards. Reliance on its subsidiary, Si Creva, for on-book lending creates a single point of failure; any disruption to Si Creva could severely impact OnEMI. The high proportion of unsecured loans within its portfolio inherently raises credit risk, especially with upward trends in retail bad loans. The fintech lending space is competitive, with companies like KreditBee recently achieving unicorn status. Furthermore, the recent dip in FY25 financial performance and negative operating cash flows raise questions about sustained profitability, a key factor for investors. Managing the increasingly complex regulatory environment will also add compliance costs. The 1.6x P/ABV valuation may reflect these considerable execution and risk factors.