Nykaa, Policy Bazaar, Paytm: Lock-in period of 10 IPOs to expire this November

November is going to see a huge supply of shares as lock-in periods of at least 10 companies including PB Fintech (Policy Bazaar), One97 Communications (Paytm), FSN E-Commerce (Nykaa), Tarsons Products and Go Fashion (India) are about to expire. The IPO lock-in period refers to the time span during which pre-IPO investors are not eligible to sell their shares.

It is computed from the allotment of the company. The end of the lock-in period is important because retail investors begin selling the shares even before the lock-in end date. Many of these shares, especially of the new age companies, have given mixed returns to investors since their listing.

Nykaa, which made a market debut on 10 November, 2021, has given just 1 percent return to investors against its issue price of Rs 1,125. Shares of the company have reduced over 50 percent from an all-time high of Rs 2,574 on 26 November 2021.

It was followed by Fino Payments Bank, which was listed on 12 November, 2021. Shares of the lender have decreased by 65 percent so far against the issue price of Rs 577. Sigachi Industries, SJS Enterprises, PB Fintech, Sapphire Foods and Paytm will also complete their one year of listing by 18 November.

The stocks of Sigachi Industries and Sapphire Foods are up by 63 percent and 22 percent, respectively. The shares of Paytm, PB Fintech and SJS Enterprises are now down by 70 percent, 60 percent and 17 percent from their respective issue price. Latent View, Tarson Products, and Go Fashion are going to complete one year of listing between 23 November and 30 November. Shares of Go Fashion and Latent View have gained over 90 percent so far against their respective issue price.

According to Sachin Dixit, an analyst at JM Financial, as new age companies like Nykaa, Delhivery, PB Fintech, and Paytm are expected to see their lock-in expire in November 2022, potential buyers might be spoilt for choice. He further stated that there could be a sharp dip in share price if even a small set of investors decide to liquidate their position.

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