Investors' patience will now be tested after a record IPO in November

- In November, 10 companies raised a record Rs. 5,000 crore collected

Share prices fluctuate when anchor investors start selling their shareholdings at the end of a 90-day lock-in period in an IPO allotment.

According to the EPO, November was a bumper month in which 10 companies lost a record Rs. 2,119 crore. However, December will test the patience of investors who invest in stocks of these companies as the one-month mandatory lock-in period for anchor investors is coming to an end this month.

As per SEBI rules, shares allotted to anchor investors are locked for 90 days from the date of allotment so they cannot sell the shares allotted to them during this period. Anchor Investors are large companies that invest heavily in IPOs. Stock prices fluctuate when anchor investors start selling their shares at the end of a 90-day lock-in period in an IPO allotment.

The anchor investors' lock-in period of 10 IPOs in November is coming to an end in December. These companies include Nayaka, Paytm, Policybazar, Sigachi Industries, Tarsons Products, Go-Fashions, SJS Enterprises, Latent View, Sapphire Foods and Fino Payment Bank. As a result of the expiration of the 30-day lock-in period for their anchor investors in the aforesaid newly listed companies, the stock market may see volatility in the stock market. Because anchor investors can now sell their shareholding.

The lock-in period for Nayaka Company's anchor investor has ended on December 6, in Fino Payments on December 7 and in SJS Enterprises on December 10. The lock-in period for Anchor Investors in PB Fintech is December 16, in Sigachi Industries December 16, in Paytm December 18, in Sapphire Foods December 30, in Latent View Analytics December 30, and in Tarsons Products on December 3.

Of the 10 companies listed on the stock exchange in November, five are currently trading below their issue price - including Fino Payment Bank, SJS Enterprises, One3 Communications, Sapphire Foods and Tarson Products. If anchor investors start selling their shareholdings, the price of that stock could come under pressure.

Most stocks where a large portion of the total equity stocks are allotted to anchor investors are under increasing pressure as the lock-in period draws to a close. Shares of 10 of the 12 newly listed companies have declined by an average of 9 per cent, with anchor allotments accounting for more than 10 per cent of the total equity stock. Of the 10 companies, four have more than 10 per cent allotment of anchor investors, including 11.5 per cent of Fino Payments, 12.5 per cent of SJS Enterprises, 12.5 per cent of Sapphire Foods and 12.5 per cent of Go Fashions. Therefore, there is a belief in the market that anchor investors will sell their shares at the end of the lock-in period. According to a market research report, only 10 out of 21 IPO issues have managed to close in the green zone on the day after January when the lock-in period of anchor investors ended.

It is to be mentioned that the calendar year 2021 has been in the name of IPO. As of November of the current calendar year, there have been six IPOs and they have raised a total of Rs 1.16 lakh crore from the primary market, which is a record.