Summary of this article
Shares worth 11 billion dollars face upcoming lock-in expiries.
Sudden stock supply increases might trigger short-term price volatility.
Retail investors must evaluate company fundamentals before panic selling.
After 2025’s IPO deluge and the recent momentum seen in the primary market, early investors are eagerly awaiting the end of the lock-in periods. Notably, the lock-in periods for a large number of companies are scheduled to expire almost simultaneously over the next few months.
According to a research note by Nuvama Alternative and Quantitative Research, the lock-in period of 53 companies is slated to end between July 6, 2026, and September 30, 2026. The total value of the shares which will be free for trade post the lock-in period is estimated to be around $11 billion.
The almost simultaneous release of a high volume of shares has led many investors to wonder about the impact of this lock-in expiry. Here’s a look at how the sudden influx of liquidity in these recently listed stocks will alter the market dynamics and affect the performance of individual stock holdings.
What Is A Lock-In Expiry
A share lock-in period is a fixed time period in which early shareholders of an IPO-bound firm, such as the promoters, venture capitalists, and institutional investors, are restricted from selling their holdings following the debut of the stock.
The lock-in mechanism has been put in place by market regulators to ensure that the stock trades in a stable manner after it lists. The lock-in mechanism stops promoters from immediately selling their stakes, and protects public shareholders from sudden price volatility as early investors often hold a sizeable chunk of the company’s total shareholding.
However, once the lock-in period ends, early shareholders have the option to liquidate their holdings by selling the stock. Thus, pre-listing institutional investors, corporate promoters, and private equity funds become free to sell their stake if they want to. However, such lock-ins can also potentially impact retail investors as they navigate the price fluctuations that typically follow an increase in the tradeable float.
The Scale of the Upcoming Lock-In Expiries
According to the research note, the upcoming share lock-ins are spread across various time horizons, such as one-month, three-month, and six-month brackets. In the near-term one-month and three-month windows, the lock-in period of several companies is set to end. These include shares of Turtlemint Fintech Solutions and several other firms that were listed earlier in June.
As many as 13 million shares, representing 4 per cent of its total outstanding shares, will be free for trade. On the other hand, Hexagon Nutrition’s 5 million shares will also be free for trade. The lock-in period for OnEMI Technology Solution’s 8 million shares will end on August 4; the stock was listed earlier in May.
However, the biggest blocks of shares which will be available for trade are in the six-month and beyond categories. Notably, the companies whose shares will be unlocked include Bharat Coking Coal, which will see the lock-in period ending for 3,259 million shares on July 17. Other major lock-in expiries include Shadowfax Technologies with 260 million shares , JSW Infrastructure with 420 million shares and Amagi Media Labs with 121 million shares.
Despite the massive number of shares becoming free to trade for early backers, the actual market supply is expected to be contained, as not all of these shares will be sold on the exchanges because a sizable portion of these shares is also held by the promoter and group.
“The value pertains to the total lock-up opening shares, but it’s important to note that not all of these shares will come for sale as a sizable portion of these shares are also held by Promoter & Group,” Nuvama said.
Impact on IPO and Retail Investors
Retail investors received shares during the IPO or bought them post-listing; the end of a lock-in period can be a significant event to track. The end of a lock-in expiry can potentially cause a sudden increase in the supply of shares when pre-listing investors choose to sell their holdings to secure profits. This, in turn, can create sudden selling pressure on the stock, which then lowers its price in the short term.
On the other hand, if a stock is trading below its public issue price, early backers might choose to hold on to the stock instead of booking a loss. This can potentially mitigate immediate pressure.
Thus, retail investors should evaluate the fundamentals of the company’s business, such as its financial health and future growth prospects, rather than panicking. Thus, retail investors should track whether non-promoter institutional backers are considering an exit route or plan to remain invested.
