Restrictions on the sale of approximately $4 billion worth of newly listed Indian shares are set to expire on Monday, adding pressure to a stock market that has already lost $1 trillion in value since mid-December.
Lockups on companies like BrainBees Solutions Ltd. (operator of FirstCry), Ceigall India Ltd., Ola Electric Mobility Ltd., and Unicommerce eSolutions Ltd. will end on Monday, according to data from Nuvama Alternative & Quantitative Research. While this marks India’s largest lockup expiry in recent months, not all of these shares will be available for sale, as the companies' founders hold significant stakes, says Abhilash Pagaria, head of the research team.
The expiration of lockups could put pressure on the pipeline of Indian IPOs with the securities regulator reviewing over 60 applications which has remained resilient despite the broader pessimism surrounding the country’s stock market, driven by concerns over a slowing economy and weaker earnings growth. The total market capitalization of Indian stocks has dropped by 20% from its recent peak in December, now standing at $4.1 trillion.
“If the weak sentiment in the secondary market continues, it’s likely to create headwinds for the primary market as well,” said Sunil Damania, chief investment officer of Marketsmojo Asset Management.
According to Nuvama Alternative, other companies with expiring lockups include Swiggy Ltd., Niva Bupa Health Insurance Co., and Acme Solar Holdings Ltd.
