Stock Rebounds Amid Heavy Trading Volumes Following Sharp Decline
Mumbai: Shares of One MobiKwik Systems Ltd. saw a sharp recovery on March 18, 2025, rallying 20% to ₹298 per share after being locked in the upper circuit. This surge comes a day after the stock plunged 15% to a 52-week low of ₹231 due to selling pressure from the expiration of its three-month IPO lock-in period.
The rebound was accompanied by heavy trading volumes, nearly six times the 10-day average, reflecting renewed investor interest. Market analysts attribute the recovery to a combination of technical factors, short covering, and fresh buying interest at lower levels.
Impact of IPO Lock-In Expiry on MobiKwik Stock
MobiKwik’s steep decline on March 17 was primarily triggered by the unlocking of 5 million shares, which accounted for 6% of the company’s outstanding equity. The estimated value of these unlocked shares is $16 million, creating a temporary oversupply in the market.
Figures Post IPO Lock-In Expiry:
- Lock-In Expiry Date: March 17, 2025
- Total Shares Unlocked: 5 million
- Percentage of Total Equity: 6%
- Estimated Value of Unlocked Shares: $16 million
Following the expiry, several pre-IPO investors and institutional shareholders sought to offload their stakes, resulting in a significant dip in stock value before its sharp rebound on March 18.
Stock Performance Since IPO Listing
MobiKwik debuted on the stock exchanges in December 2024 and witnessed strong initial gains before facing sustained selling pressure.
MobiKwik’s Market Performance at a Glance:
- IPO Issue Price: ₹279
- Listing Price: ₹440 (58% premium over issue price)
- All-Time High: ₹698 (December 2024)
- 52-Week Low: ₹231 (March 17, 2025)
- March 18 Closing Price: ₹298 (20% recovery in a single session)
Despite the rebound, the stock remains down by 32% from its listing price and over 57% from its all-time high.
Factors Contributing to MobiKwik’s Recent Decline
1. Lock-In Expiry Triggering Selling Pressure
As the IPO lock-in period ended, a large number of pre-IPO investors and institutional shareholders gained the ability to sell their holdings, leading to an increase in share supply and downward pressure on prices.
2. Leadership Uncertainty and Management Changes
MobiKwik recently faced leadership challenges following the resignation of Chandan Joshi, a key executive within the company. Investors remain cautious as management transitions often create uncertainties regarding the company’s future strategic direction.
3. Regulatory Challenges Impacting Lending Business
The Reserve Bank of India’s (RBI) tightened regulations on digital lending and BNPL (Buy Now, Pay Later) services have affected MobiKwik’s ability to expand in its credit business segment. Regulatory constraints have led to a contraction in the company’s lending operations, raising concerns about future revenue growth.
4. Broader Weakness in the Fintech Sector
The Indian fintech space has experienced a broader market correction, with several digital finance firms witnessing valuation declines amid regulatory challenges, rising competition, and changing consumer behavior.
Why Is MobiKwik’s Stock Rebounding?
1. Technical Rebound After a Sharp Drop
Following a steep decline, stocks often experience technical rebounds, as traders look for short-term buying opportunities. Investors who perceived the stock as oversold took positions, driving the recovery.
2. Short Covering Fueling Upward Momentum
Market participants who had shorted MobiKwik shares ahead of the lock-in expiry were forced to cover their positions as buying pressure increased, contributing to the rally.
3. Optimism Over Long-Term Growth Potential
Despite recent regulatory challenges, MobiKwik continues to hold a strong position in India’s digital payments sector. Some investors see the company as a long-term play in the growing fintech ecosystem.
4. Adjustments to Business Strategy
The company has begun shifting its focus toward merchant payments and UPI-based transactions, in response to RBI’s lending restrictions. This strategic shift may help MobiKwik stabilize its revenue streams over time.
Expert Opinions on MobiKwik’s Market Volatility
Industry experts suggest that MobiKwik’s recent price movement is influenced by both fundamental and technical factors.
Abhishek Jaiswal, Fund Manager at Finavenue, stated:
“The decline in MobiKwik’s stock was primarily driven by the lock-in expiry and leadership uncertainty. Additionally, regulatory constraints have impacted the company’s lending business. However, short-term recoveries like today’s are expected in volatile stocks.”
Goldman Sachs Market Analyst View:
“The Indian fintech landscape is evolving, and regulatory adaptations will play a key role in shaping the sector’s future. Investors are closely monitoring how companies like MobiKwik realign their business models to comply with RBI regulations while sustaining growth.”
Outlook: What Lies Ahead for MobiKwik?
1. Stock Volatility Likely to Persist
While the stock has staged a strong recovery, further volatility is expected as institutional investors reassess their positions post lock-in expiry.
2. Market Focus on Earnings Performance
Investors will closely track MobiKwik’s next quarterly earnings report, which will provide insights into revenue growth, profitability, and regulatory compliance.
3. Business Strategy Adjustments to Boost Confidence
MobiKwik is expected to realign its business strategy by focusing on UPI-based transactions and merchant services, reducing reliance on BNPL and credit lending.
4. Potential Sector Re-Rating
The fintech sector may experience a valuation re-rating if companies successfully navigate regulatory challenges and demonstrate sustainable growth strategies.
