As the pre-listing shareholder lock-ins of 37 companies are poised to conclude within the next four months, the market is bracing for the potential impact on trading volumes and price fluctuations. These lock-ins, mandated by the Securities and Exchange Board of India (Sebi), require anchor investors to reduce their positions in companies in which they were allocated shares one day before a public offering’s commencement.
Key companies to watch in the coming weeks include Netweb Tech, with a 3% lock-in ending on August 23; SBFC Finance, with a 3% lock-in ending on September 11; Yatharth Hospital, with a 4% lock-in ending on September 1; and Concord Biotech, with a 3% lock-in concluding on September 13. These dates mark the expiration of the one-month and three-month lock-in periods for these companies’ anchor investors, as reported by Nuvama Institutional Equities.
Abhilash Pagaria, Head of Nuvama Alternative & Quantitative Research, notes that the lifting of pre-listing shareholder lock-ins could lead to heightened trading volumes in certain counters. This is particularly true for companies where the lock-in period is significant and where the current market price significantly exceeds the issue price. Pagaria highlights that between August 22, 2023, and December 31, 2023, a total of 37 companies are set to conclude their pre-listing shareholder lock-ins.
Interestingly, many of these companies have witnessed substantial price appreciation in the period leading up to the conclusion of their lock-ins. For instance, Netweb Tech’s share price has risen by 58.5% from its issue price of ₹500 to ₹792.50. Yatharth Hospital’s current market price of ₹376.30 reflects a 25% increase from its issue price, while SBFC Finance has experienced a 58.5% surge in share price. IdeaForge and Utkarsh Small Finance Bank have also seen their shares rise by 50% and 91%, respectively.
On the other hand, the stock price of LIC, which is set to have its pre-listing lock-in lifted on November 13 after eighteen months, is currently trading at ₹663.9, representing a 30% decrease from its initial listing price of ₹949. As lock-ins conclude and anchor investors adjust their positions, the market anticipates increased trading activity and potential price volatility in the coming months.