Sale restrictions on about USD 4 billion of newly listed Indian shares are set to expire on Monday. This would greatly add pressure to a stock market that has already erased around USD 1 trillion in value since mid December.
According to data compiled by Nuvama Alternative & Quantitative Research, lockups on FirstCry operator BrainBees Solutions Ltd., Ola Electric Mobility Ltd., Ceigall India Ltd., and Unicommerce eSolutions Ltd. end on Monday.
It is India’s biggest lockup expiry in recent months. However, as the companies’ founders hold sizable portions, according to Abhilash Pagaria, head of the research, not all of these shares will be up for sale.
The lockup expiries could test the pipeline of Indian IPOs, wherein, the securities regulator said that it is processing more than 60 applications, having defied the broader pessimism engulfing the nation’s shares amid the economic slowdown and dwindling earnings growth.
The overall m-cap of Indian stocks has fallen 20 percent from their recent peak in December to USD 4.1 trillion.
Sunil Damania, Chief Investment Officer of Marketsmojo Asset Management stated, “If the weak sentiment in the secondary market continues, it’s likely to create headwinds for the primary market as well.” Furthermore, according to Nuvama Alternative, other companies with lockups expiring are Swiggy Ltd., Niva Bupa Health Insurance Co. and Acme Solar Holdings Ltd.
