Tale Of Two Trades: Mobikwik Tanks 50% From Highs But High-Value Traders Make Crores

As the second fintech major to get listed, One Mobikwik System Ltd.'s initial public offering had witnessed stellar popularity among retail investors and qualified institutional buyers.

The Rs 572-crore issue received applications worth Rs 39,542 crore, as the offer was subscribed over 119 times.

Since then, the stock has had a difficult journey, but the gloom hasn't affected all its investors.

Opportunity Amid Adversity

Despite the valuation falling to less than half of what it was at its peak, the stock has made crores in profits for those trading in high volumes.

In the two months since its listing, over 500 bulk deals have been executed to trade Mobikwik's shares. Most, if not all, are squared away by the end of the day.

According to data from NSE compiled and analysed by NDTV Profit, the total value of shares sold stood higher than the value of shares bought, indicating a profit of more than Rs 74 crore over 45 days.

We have only considered deals where the traded quantity was roughly the same across 'buy' and 'sell' deals within a 1% differential, while the actual value may have differed.

The number of high-volume trades executed on an intraday basis also reflect in delivery figures, since the number of shares bought and sold on a day through bulk deals were similar.

Delivery trades are those where the buyer intends to carry forward their position, with shares transferred to their demat account as per the T+1 settlement cycle. Traders cannot reverse their position till this happens. A higher share of delivery-based trades indicates that market participants have a long-term view on the stock when taking the position.

Excluding the day of its listing, the portion of delivery trades as a percentage of the total trades conducted for the fintech stock stood at 7.5%, only a fraction of the market average of 25–35%.

Who's Rocking The Boat?

To find possible causes of volatility in Mobikwik's stock price, one should look at the free float — the percentage of the company's total shares that can be freely traded in the stock market. This excludes those held by the promoters, and those subject to a lock-in period.

While 74.8% of the shares are held by the public, the percentage of shares free to be traded is only at 18.4%. This is because shares held by anchor investors, as well those who were allotted in private placements in the company, are subject to various lock-in periods.

Looking once again at the average quantity traded in the stock, it amounts to over 142% of the free float available. Of this, the average quantity traded marked for delivery amounted to only 8.4%.

Notably, high-volume trades amid lower liquidity conditions tend to have a greater impact on price movements

A Lesson In History?

Mobikwik stock is trading at a nearly 30% discount to the price at which they got listed. It either is a victim of the broadly negative market sentiment, or shares the fate of its only listed peer.

Shares of One97 Communications Ltd., which operates digital payments platform Paytm, got listed on the NSE in Nov. 2021 at Rs 1,950 per share, a milestone they still haven't reclaimed. Paytm shares fell 72% over the next four months since listing.

Having listed in December 2024, Mobikwik shares surged 58% in the short span of less than two weeks after getting listed at the level of Rs 440 on NSE. Since then, they've fallen over 55% from the peak they hit two months ago, and are currently trading much below the price at which they got listed, though still above their issue price.