The lock-in period of Paytm expires on November 18

From Nykaa to Paytm: Lock-in period of 10 IPOs expire this month

The volatility in the domestic equity market so far in November has wreaked havoc on the recently listed new-age tech companies such as Paytm, Nykaa, and PB Fintech. According to analysts, many of these newly listed companies face a litmus test as mandatory lock-in periods of as many as 10 stocks are set to expire for pre-IPO investors, which may result in heightened volatility in the near term.

The table below shows the lock-in expiry date of 10 companies. 

What is the lock-in period?

An initial public offering (IPO) lock-in period is a time set by the underwriter, which prevents early investors and insiders from liquidating their pre-IPO stocks for a certain time post listing on bourses. This usually varies between 6 and 12 months. During the lock-in period, the pre-IPO investors are not eligible to sell their shares. If an investor breaches this rule, they may have to pay a certain fee to the underwriter, which is usually equal to 2% of the value of the shares sold.

As per SEBI rule, one-year lock-in period is necessary for pre-IPO investors, post listing of the shares on the bourses.

Also Read: INOX Green Energy’s ₹740 cr IPO to open on Nov 11; key things to know

How these 10 IPOs have performed so far

Nykaa

Nykaa, which made debut on domestic bourses on November 10, 2021, has given just 0.4% returns to its shareholders against its issue price of ₹1,125. The largecap stock, with a market capitalisation of ₹49,745 crore, hit an all-time low ₹975.50 on October 28, 2022. It touched an all-time high of ₹2,574 on November 26, 2021.

On Thursday, shares of FSN E-Commerce Ventures, the parent company of Nykaa, opened lower and declined as much as 7.15% during the session. The shares currently trades 61% lower than its 52-week high of ₹2,574 on November 26, 2021.

Paytm

One97 Communications, the parent company of fintech major Paytm, is one of the worst performing IPOs of the year, which has wiped off 70% of investors' wealth since listing. The stock made its market debut on November 18, 2021 at an issue price of ₹2,150 and successfully raised ₹18,300 crore. The stock hit its all-time high of ₹1,961.05 on its listing day on November 18, 2021, while it touched a record low of ₹511 on April 5, 2022. 

PB Fintech

PB Fintech, the SoftBank-backed parent of online insurance aggregator Policybazaar, has delivered a negative return of 68% in nearly one year. The stock, which debuted on domestic bourses on November 15, currently trades at ₹643 against its IPO price of ₹980. The share price has fallen 33% in the last six months and 60% on a year-to-date (YTD) basis.

Also Read: Citi to sell Nykaa shares worth ₹250 crore via block deal; stock falls 7%

Tarsons Products 

Tarsons Products, a manufacturer of disposable plastic labware, currently trades near its IPO issue price of ₹662 on the BSE after making a strong debut on November 26 last year. The stock of Kolkata-based life sciences company has delivered flat returns to its shareholders, while it hit a 52-week high of ₹928.65 on November 29, 2021. The smallcap stock, having a market cap of ₹3,690 crore, touched a 52-week low of ₹570 on February 28, 2022.

Go Fashion (India)

The homegrown apparel company, which debuted on November 30, 2021, has delivered 79% return to its shareholders against the issue price of ₹690 in nearly one year, while it rose 30% in the past six months. The Chennia-based company raised ₹1,014 crore from the public issue that was subscribed 135.46 times during November 17-22. 

Fino Payments Bank

Fino Payments Bank share has given negative return of 66% in the last one year, with the stock price falling to ₹196 against the IPO issue price of ₹577. The IPO had received tepid response with overall subscribtion of just 2x, which consisted of ₹300 crore of fresh fund and ₹900 crore of secondary share sale by promoter Fino Paytech. The lock-in period for pre-IPO investors expires on November 12.

Also Read: Archean Chemical to launch ₹1,462 cr IPO on Nov 9; 10 things to know

Sigachi Industries

Microcrystalline cellulose Sigachi Industries, which debuted on November 15, commands a premium of 62% against the IPO issue price of ₹163. The stock currently trades at ₹263, down 59% against its 52-week high of 648 touched on November 17, 2021.

SJS Enterprises

Shares of decorative aesthetics player currently trades at a discount of 13% at ₹470, against the IPO issue price of ₹542 on the BSE. With a market capitalisation of ₹1,436.67 crore, the stock trades 14% lower than its 52-week high of ₹551 on November 15. It touched a 52-week low of ₹340 on December 27, 2021.

Sapphire Foods

Sapphire Foods, which raised ₹2,073 crore through the public offer, delivered 14% return to its shareholders in the last one year, with the share price trading at ₹1,335, against the IPO issue price of ₹1,180 on the BSE. The franchisee operator of KFC and Pizza Hut outlets in India has given 22.5% in the past six months, while it fell 9% in a month.

Latent View Analytics

The global data and analytics company, which debuted on November 23, trades 91% higher at ₹374, against its issue price of ₹197 on the BSE. The stock hit a 52-week high of ₹775 on November 26, 2021, and 52-week low of ₹305.25 on May 20, 2022. 

Also Read: boAT delays IPO plans, raises ₹500 crore in fresh equity

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