A total of Rs 1.17 trillion (approximately $13.9 billion) worth of shares, representing pre-IPO lock-in periods, are set to be unlocked between November 28, 2024, and January 31, 2025. The shares belong to around 50 companies that had gone public in recent months. These stocks, previously restricted from trading, will now be eligible for sale in the secondary market, potentially leading to significant changes in liquidity and pricing.
The unlocking of shares is a significant event for both institutional and retail investors as it marks the conclusion of the lock-in period after IPO listings. However, experts caution that not all unlocked shares are likely to flood the market for sale, as a considerable portion is held by promoters or their affiliates. These stakeholders often prefer holding on to their shares for longer-term strategic reasons, rather than liquidating them immediately after the lock-in ends.
Key Companies Set for Lock-In Expiry
Among the companies poised to see their shares unlocked are some high-profile names, including NTPC Green Energy and Waaree Energies. NTPC Green will unlock 183 million shares on December 26, 2024, which accounts for 2% of its total outstanding shares. Waaree Energies, which is also scheduled for a lock-in expiry on January 22, 2025, will unlock 4 million shares, representing 1% of its equity.
Some notable firms in the 1-month lock-in category include Afcons Infrastructure, Sagility India, ACME Solar Holdings, and Swiggy. Afcons will see 18 million shares (5%) unlocked on December 2, while Swiggy’s 65 million shares (3%) will be unlocked by December 11. Additionally, Niva Bupa Health Insurance, Zinka Logistics, and others are part of this initial wave.
The unlocking could generate a flurry of trading activity in the coming weeks, especially for companies like NTPC Green and Waaree Energies, which are in the energy and renewable sectors. These sectors are attracting growing investor interest due to increasing demand for sustainable energy solutions.
Impact on Market Liquidity and Pricing
The opening of the lock-in period often leads to increased market liquidity as previously restricted shares become available for trading. This influx of shares can exert downward pressure on the stock price, especially if a large number of institutional investors or insiders decide to sell their holdings. However, as noted by market analysts, the impact may not be uniform across all stocks. Companies with strong fundamentals or those in sectors with robust growth potential, like renewable energy, might see less selling pressure, with many promoters opting to retain their stakes.
Conversely, stocks in sectors facing challenges or those with weak investor sentiment may experience larger price fluctuations as the newly unlocked shares come to market.
Prominent Unlocks in 3-Month and 6-Month Lock-In Categories
In the coming months, several companies will see their shares unlocked in the 3-month and 6-month lock-in categories. For instance, Premier Energies, scheduled for a 3-month lock-in expiry on November 28, will release 9 million shares (2%), while Bajaj Housing Finance will see 126 million shares (2%) unlocked on December 12.
More Read
The largest unlock in this period comes from Awfis Space Solutions, which will open up 39 million shares (56%) on November 29. Le Travenues Technology, with 284 million shares (73%) slated for release on December 16, will also stand out in terms of volume.
Meanwhile, the 1-year lock-in period will see substantial releases, including those from Flair Writing Industries, which has a combined 54 million shares (51%) set to unlock between November 28 and November 30. Happy Forging, Azad Engineering, and several others will also be part of this batch.
Long-Term Outlook and Investor Strategy
While the unlocking of shares may present short-term opportunities, market participants are advised to take a long-term view when evaluating stocks. The strategic intentions of promoters and large institutional shareholders, who often retain their holdings, can help provide stability in the wake of the unlock.
Moreover, sectors with strong growth drivers, such as renewable energy and tech, are expected to continue attracting investor attention, which could offset the potential selling pressure from unlocked shares. On the other hand, investors should remain cautious in sectors facing structural issues or regulatory challenges.
As these shares become tradable, the upcoming months will likely be filled with increased market activity, as both retail and institutional investors adjust their portfolios. It will be interesting to see how these stocks fare once the floodgates are opened and the free market determines their true valuation.
