Lock-in expiries for many recently-listed companies are approaching and by November, shares worth around $17 billion will be eligible for trading, according to research firm Nuvama.
Though, it is important to note that lock in expiry does not equate to guaranteed selling by the shareholders, it just means that shares are now open to be sold if the trader so wishes.
Among the companies facing the largest potential increase in tradable shares as a proportion of their outstanding equity, Central Mine Planning & Design Institute tops the list, with lock-ins on 464 million shares, or 65% of its outstanding shares, set to expire on October 6.
Closely followed by Amir Chand Jagdish Kumar, where 62 million shares representing 60% of the equity will become eligible for trading on October 5. Aye Finance will unlock 146 million shares, or 59% of outstanding equity.
Other companies with more than half of their outstanding shares becoming eligible for sale include Rajputana Stainless, Om Power Transmission, Innovision, GSP Crop Science and Fractal Analytics.
In terms of absolute numbers shares, Central Mine Planning & Design Institute again bags first place, with 464 million stocks becoming eligible for trade, followed by Aye Finance with 146 million shares, Fractal Analytics with 87 million shares, OnEMI Technology Solution with 66 million shares, Amir Chand Jagdish Kumar with 62 million shares, Rajputana Stainless with 46 million shares, and Clean Max Enviro Energy Solutions with 34 million shares.
GSP Crop Science, SBI Funds Management, and Sai Parenteral will also see sizable lock-in expiries of 25 million, 23 million, and 21 million shares, respectively.
What Does This Mean For Investors?
Lock-in periods prevent certain pre-IPO investors, promoters, employees, and institutional shareholders from selling their shares immediately after listing. Once these restrictions expire, investors gain the flexibility to monetize their holdings.
In many cases, short-term price weakness caused by increased supply can create opportunities for long-term investors if the company's fundamentals remain strong.
With India's IPO market remaining active, the upcoming lock-in expiry cycle will serve as an important test of investor confidence.
While the release of $17 billion worth of shares may increase market volatility, the actual impact will depend less on the expiry itself and more on how shareholders choose to respond once the restrictions are lifted.
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