Four recently listed IPO stocks dip ahead of anchor lock-in expiry

Shares of four companies that made their stock market debut last month fell, ahead of the end of the lock-in period for anchor investors. Krsnaa Diagnostics, Windlas Biotech, Exxaro Tiles and Devyani International shed between one per cent and three per cent in Thursday’s trade. The Nifty Smallcap 100 index, on the other hand, rose 0.64 per cent. The 30-day lock-in period for anchor investors ends on Monday for all the four companies. In recent weeks, shares of Zomato and Glenmark Life Sciences have come under pressure after the end of their respective anchor lock periods.

As per an analysis done by Abhilash Pagaria, Asst Vice President, Edelweiss Alternative Research, anchor investors hold 5.6 million shares (close to 18 per cent stake) of Krsnaa Diagnostics. Meanwhile, in the case of Windlas Biotech anchor investors hold 2.6 million, or 12 per cent of total outstanding shares. Shares of Krsnaa and Windlas are currently trading 6 per cent and 16 per cent below their issue price.

Anchor investors hold about 2 million, or 9 per cent, stake in Exxaro Tiles and 91.7 million or 7.6 per cent stake in Devyani International. Shares of Exxaro are up 17 per cent over its IPO price and that of Devyani are up 34 per cent but have remained flat over its first day close.

“Given the experience with Zomato, savvy traders are selling shares of companies ahead of anchor lock-in expiry. The strategy, however, may not work every time. The four companies where anchor lock in is set to end have not given returns on the expected lines. So institutional investors might continue to hold them,” said an analyst.

Anchor investors are institutional investors like mutual funds, life insurance companies and foreign funds. They are allotted shares a day before the IPO opens to build investor confidence.