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The month of November was great for IPOs with ten issues mopping up a whopping 36,100 crore on avarege. However, the month of December would test their staying power as those newly listed stocks’ lock-ins for anchor investors end.

There are at least 10 stocks including Nykaa, PolicyBazaar and several others that will see their anchor share 30-day lock-in period expiring from 8 December.

Anchor investors are institutional investors, such as mutual funds or sovereign wealth funds, who buy substantial shares in the company just before an IPO opens for a subscription.

These investors, because they own a substantial amount of stake when a company goes public, cannot sell their shares before 30 days from the date of allotment.

Generally, share prices of stocks tend to fall on selling pressure as the 30-day lock-in period ends even though it is hard to pick a definite trend.

According to Edelweiss research, in calendar year 2021 (CY21), 51 stocks went public with 41 issues anchor investor lock-in dates already expired. As many as 76% of those issuances have experienced selling pressure on the anchor lock-in expiry date, and the average decline has been 2.6%.

In most cases, selling pressure persists over the day after anchor lock-in expiry date: as many as 61% (25 out of 41) of the issues declined by 2.2% on the day after the anchor opening date. And after five days of the anchor opening date, 61% of issues traded 3.9% down.

Nykaa, whose shares were down 2.25% on Monday to close at 2,141.80 on NSE, will see its anchor investors 30-day lock-in period expiring tomorrow 8 December.

Similary, in the November issues, there are four stocks where the anchor allocation is 10% over outstanding shares. Those include Fino Payments (11.2%) whose anchor lock-in period expires on 9 December, SJS Enterprises (14.5%) expiring on 10 December, Sapphire Foods (12.4%) expiring on 16 December and Go Fashion (12.2%), whose anchor investors 30-day lock-in period expires on 27 December.

See the table for full list of stocks who anchor investors lock-in period ends in December.

Source: Edelweiss Alternative research
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Source: Edelweiss Alternative research
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