Shares of nine recently listed companies may see high trading activity this week as pre-IPO lock-ins expire. The National Stock Exchange of India accounts for over half of the Rs 5,735 crore total. Investors often watch these events closely, though many promoters choose to keep their stakes intact after unlocking.
Shares of nine recently listed companies may witness heightened trading activity in upcoming sessions, as the pre-IPO shareholder lock-ins will expire this week. The shares involved are worth about $604 million, or Rs 5,735 crore, according to a report released by Nuvama Alternative & Quantitative Research.
The National Stock Exchange of India, which hit the bourses last month, accounts for more than half of that. Lock-ins on about 18.9 million shares, roughly 0.8% of its equity, expire on Oct 22. The stake is valued at about Rs 3,350 crore, based on the Oct. 15 closing price of Rs 1,774 apiece.
The other large unlock this week is Anantam Highways Trust, as 1142.7 million units, or around 66% of the outstanding units will be unlocked on Monday after a one-year freeze. They are valued at about Rs 1,500 crore.
What Opens When
CompanyLock-in EndsLock-in TypeShares (mn)% of EquityApprox. Value (Rs cr)*CMP vs Issue PriceManika PlastechOct 191 month4.44%23+21%Om Power TransmissionOct 196 months18.855%310-6%Anantam Highways TrustOct 191 year142.766%1,498+5%SS RetailOct 211 month1.72%129+79%Jindal Supreme (India)Oct 211 month2.04%33+76%Hero MotorsOct 211 month17.94%274+82%Caliber Mining and LogisticsOct 213 months1.62%90+33%National Stock Exchange of IndiaOct 221 month18.90.8%3,353-1%Sonaselection IndiaOct 221 month2.14%21Flat
*Based on Oct 15 closing prices.
Gains May Tempt Investors
Early backers of these companies may look to book profits, as several of these listed entities have risen sharply as compared to their debut prices.
The most prominent among them is Hero Motors, as it trades at Rs 153, about 82% above its Rs 84 IPO price. About 17.9 million shares, worth around Rs 274 crore, become free to trade on Oct 21. SS Retail is up about 79% from its issue price, and Jindal Supreme (India) about 76%. In both, the unlocked tranche is small relative to total equity.
Om Power Transmission is the most notable small-cap unlock this week. Its six-month lock-in covers about 55% of total equity, roughly 18.8 million shares. The stock is about 6% below its Rs 175 issue price and about 20% below its 52-week high. Of all the stocks unlocking this week, it has the largest share of its equity becoming tradable.
Notably, the end of a lock-in only makes shares eligible for sale, and does not mandate any offloading on part of the existing investors. A large part of the stock unfreezed is often held by promoters and promoter group entities, who usually keep their stakes intact. Market participants generally watch for block deals and changes in volume around these dates rather than assuming the whole tranche will be sold.
This week's unlocks are the first of a much larger wave. Nuvama estimates that 101 companies will see pre-listing lock-ins end between Oct. 19, and Jan. 29, next year, covering shares worth about $24 billion.
This will be followed by more expiries in the coming period, with lock-ins of Varmora Granito, Xtranet Technologies, Lohia Corp, INDO-MIM and Midwest scheduled to end on Oct 26, followed by Moneyview, Acevector and Elevate Campuses later in that week.