Dalal Street braces for flood of IPO lock-in expiries worth nearly $20 billion in next 3 months

If the pace of FII selling continues, the additional supply from lock-in expiries could amplify pressure on certain counters.

Dalal Street is heading into a heavy season of IPO lock-in expiries, with a wave of pre-listing shareholder restrictions set to lift over the next three months. According to estimates by Nuvama Institutional Equities, as many as 57 companies will see their lock-ins unwind between August 25 and November 27, releasing close to $20 billion worth of stock into the market.

While not all of these shares are expected to immediately hit the secondary market—given that promoters often choose to hold on—brokers and investors alike are bracing for increased activity in the respective counters.

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The upcoming quarter will feature a series of unlocks across a wide swathe of sectors, from cement and jewellery to finance, real estate, and consumer services. In the near term, smaller unlocks will set the tone. For instance, GNG Electronics, Brigade Hotel Ventures, Aditya Infotech, and Sri Lotus Developers are among the first in line as August winds down, collectively putting millions of shares in circulation.

September will bring heftier names, such as JSW Cement, which has nearly 37 million shares unlocking in mid-month, and HDB Financial Services, scheduled for late September with 23 million shares. October is lined up with unlocks from companies such as Anthem Biosciences and Travel Food Services, while November could prove decisive with a cluster of names including BlueStone Jewellery, M & B Engineering, and Kalpataru.

But the most eye-catching event arrives in November when electric two-wheeler maker Ather Energy sees its six-month lock-in end. A massive 162 million shares—representing 44 percent of its outstanding stock—will become tradable on November 6. The sheer scale of this unlock makes it one of the biggest market events of the quarter. On the same day, Highway Infrastructure and All Time Plastics will also see their restrictions lift, though at a much smaller scale. Later in November, Borana Weaves will unlock 10 percent of its shareholding.

What does it mean for the market?

The expiry of shareholder lock-ins is a normal part of the IPO cycle but tends to draw heightened attention when multiple large unlocks coincide. This can exert pressure on stock prices in the short run, even if underlying fundamentals remain unchanged.

Nuvama, in its report, noted that while the headline figure of $20 billion looks sizeable, the actual impact will depend on how much of this stock enters the market. Promoter groups, for example, typically hold longer, which can soften the blow.

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The expiries also come at a time when foreign institutional investors (FIIs) have been cautious on Indian equities, citing high valuations relative to other emerging markets. If the pace of FII selling continues, the additional supply from lock-in expiries could amplify pressure on certain counters. Conversely, a more benign global backdrop, including the prospect of US rate cuts as early as next month, could absorb some of the supply more smoothly.

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