New listings under pressure as three-month anchor lock-in period ends

Shares of recently listed companies Inventurus Knowledge Solutions (IKS) and One Mobikwik Systems plummeted on Monday as the three-month lock-in period for anchor investors expired. IKS shares fell 11.8 per cent, while Mobikwik declined 9 per cent.

 

However, Vishal Mega Mart and Sai Life Sciences, which also saw their anchor lock-in periods end, recovered from initial losses to post gains of 2 per cent and 0.6 per cent, respectively.

 

According to market experts, the decline in newly listed stocks is a concern, as anchor investors may look to liquidate their holdings given the changing market dynamics.

 

“Most new listings have come off their peaks, and with anchor investors now free to sell, there's a risk of further downward pressure,” said a broker.

 

The BSE IPO index, which tracks the performance of newly listed companies, has declined 25 per cent over the past six months. The lock-in period for International Gemmological Institute India (IGI) shares ends on Tuesday, while nine other companies will see their lock-in periods expire later this month.

 

The lock-in period applies to 2-6 per cent of the equity shareholding in these companies. Half of the shares allotted to anchor investors are subject to a 30-day lock-in, and the remaining half is subject to a 90-day lock-in. Anchor investors are institutional investors such as mutual funds, insurance companies, and foreign portfolio investors. They are allotted shares a day before the IPO opens.