Pre-IPO lock-in intervals ending for 46 companies, releasing up shares value $12 billion

The pre-listing shareholder lock-in intervals of 46 corporations will probably be lifted between June 24 and September 30, probably releasing  up shares value almost $12 billion for secondary gross sales.

The estimates are based mostly on shareholder evaluation for companies listed as much as June 19, based on Nuvama Different & Quantitative Analysis. 

The shares are primarily held by pre-IPO buyers, together with promoters, personal fairness companies, and anchor buyers. Nevertheless, a sizeable portion of the shares held by promoters and the promoter group will not be up on the market.

As an example, the one-year lock-in of JSW Infra ends on September 30 making 125.7 crore shares obtainable for buying and selling. The six-month lock-in of Mukka Proteins additionally ends in September and will launch 16 crore shares. About 2.3 crore shares of Awfis House Options, Le Travenues Know-how, and Kronox Lab Sciences could also be up on the market as their one-month lock-in ends within the subsequent few weeks.

“A small portion of those shares could also be instantly liquidated, whereas one other small portion will probably be bought off step by step, relying on the curiosity of pre-IPO holders via block offers,” mentioned Abhilash Pagaria, Head – Nuvama Different & Quantitative Analysis. 

Fall in costs

The push to promote shares after lock-in ends might result in an over-supply of shares out there, leading to a slide in share costs and the market sentiment in the direction of the inventory turning comparatively bearish, mentioned consultants.

“It’s not mandatory that all the buyers will look to exit. Additionally, given the type of liquidity obtainable, there could also be sufficient patrons to assist the value, until it’s a thinly traded scrip,” mentioned Pranav Haldea, Managing Director, PRIME Database.

The lock-in interval is totally different for various courses of buyers.

Fifty per cent of the shares allotted to anchor buyers have to be locked-in for 90 days, and the remainder have to be locked in for 30 days from the date of allotment.

For promoters, 20 per cent of the post-issue paid-up capital have to be locked in for 18 months. An allotment exceeding 20 per cent can’t be bought for six months. For non-promoters, the lock-in ends after six months.