MUMBAI
:
From 11 January to 15 April, 54 companies will have their shareholder lock-ins worth $13.52 billion lifted. This is likely to lead to a series of block deals, with domestic and global institutions, as well as high-net-worth individuals, bidding for the shares.
“The value pertains to the total lock-up opening shares, but it’s important to note that not all these shares will come up for sale as a sizable portion of them are held by promoter groups,” said Abhilash Pagaria, head, Nuvama Alternative and Quantitative Research.
Pagaria’s analysis of opening lock-ins is focussed on listings till 5 January. The companies witnessed exceptional investor interest during their IPOs. Tata Technologies, the Tata Group’s first public offer after 18 years, was oversubscribed by a massive 69 times with its stock opening 140% above its issue price on debut. Others like Indian Renewable Energy Development Agency was oversubscribed 38 times, Flair Writing (46 times), Gandhar Oil Refinery (64 times) and DOMS Industries by 93 times. All the IPOs saw robust demand from retail investors and HNIs.
“These companies, a mix of institutional stakeholders and pre-IPO investors who acted as anchors, are unlikely to dump shares immediately. Instead, they may opt for negotiated deals or block trades to make a soft exit. This gradual release of shares into the market could create some selling pressure on stock prices. This can also help for the increase free float and liquidity of stocks,” Kranthi Bathini, director of equity strategy, Wealth Mills Securities Pvt. Ltd, said.
Navama’s analysis showed Tata Tech’s 8 million shares will open on 26 February while IREDA’s 101 million and Flair’s 3 million shares will open on 23 and 27 February, respectively. Gandhar Oil’s 4.4 million shares and RR Kabel’s 71 million are set for release on 26 February and 21 March.
Honasa Consumer’s 12 million shares will be unlocked on 1 February, Inox India’s 3.3 million on 18 January and 18 March, while Happy Forgings’ 2 million shares will open on 22 January, with an additional 1.8 million shares on 21 March.
Market experts said there is sufficient liquidity and bullish sentiment to absorb the supply. “Bullish momentum prevails so there won’t be volatility when they hit the market,” Pagaria said.