Flood of Anchor Lock-In Expiries in June-September To Free Up $20-bn Worth Shares of 61 Companies

The June to September period is shaping up to be a busy one for the markets, with anchor lock-in expiries set to unlock shares worth over $20 billion for trading. A total of 61 recently listed companies, including well-known names like Borana Weaves, Aether Energy, Vishal Mega Mart, DAM Capital Advisors, and Unimech Aerospace, will see the expiry of various lock-in periods, turning a significant number of shares eligible for sale.

These upcoming anchor lock-in expiries could lead to heightened market activity and possible sell-offs, particularly if institutional investors decide to offload their stakes and book profits. The anchor lock-in expiry signifies the end of the mandatory holding period for institutional investors who participated in a company’s initial public offering (IPO). Once this period ends, those investors are free to sell their shares on the open market, thereby increasing the tradable float and opening the door for stake sales, which could, in turn, impact stock prices.

However, while the headline figure stands at $20 billion worth of shares becoming eligible for trade, it’s important to note that this does not automatically mean all those shares will hit the market. These shares will qualify for sale, but it will ultimately depend on whether the investors holding them choose to exit. In many cases, a large portion of these shares is held by promoters and their group entities, who may well opt to retain their holdings, particularly if they have a long-term view on the company.

Data compiled by Nuvama Alternative & Quantitative Research highlights the companies with their one-month anchor lock-in expiries lined up till July 2, including Borana Weaves, Belrise Industries, Prostarm Info Systems, Schloss Bangalore, and Scoda Tubes. While no companies are scheduled to see their three-month lock-in expiries during this period, a number of prominent names such as Vishal Mega Mart, Unimech Aerospace, Transrail Engineering, Muthoot Microfinance, One Mobikwik Systems, and Sai Life Sciences, are propped up to witness the expiry of their six-month pre-IPO anchor lock-in periods.

As these expiries unfold, investors and analysts alike will be keeping a close eye on how many of these newly tradeable shares actually make their way to the open market.

Previously, during the April-May period, anchor lock-in expiries had freed up shares worth over ₹2.36 lakh crore for trading. The expiry of anchor lock-ins during the period was also followed by a sharp surge in block deals, with investors and major investors leading the chunk of stake sales.

Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, had attributed the slew of lock-in expiries as a major trigger behind the spike in block deals. “When a lock-in period gets over, there is a tendency among marquee players to cash in their investments, and given that the markets have witnessed a revival in recent times, it made for perfect timing for them to exit companies,” he said.