India braces for $4 billion of expiring IPO lockups

Sale restrictions on about $4 billion of newly listed Indian shares are set to expire on Monday, adding pressure to a stock market that has already erased $1 trillion in value since mid December.

Lockups end
Lockups on FirstCry operator BrainBees Solutions Ltd., Ceigall India Ltd., Ola Electric Mobility Ltd. and Unicommerce eSolutions Ltd. end on Monday, according to data compiled by Nuvama Alternative & Quantitative Research.

It’s India’s biggest lockup expiry in recent months but not all these shares will be up for sale as the companies’ founders hold sizable portions, according to Abhilash Pagaria, head of the researcher.

The lockup expiries could test the pipeline of Indian IPOs — the securities regulator says it’s processing more than 60 applications — which has defied the broader pessimism engulfing the nation’s shares amid concerns about the slowing economy and earnings growth.

Market cap drops
The total market capitalisation of Indian stocks has fallen 20% from their recent peak in December to $4.1 trillion. “If the weak sentiment in the secondary market continues, it’s likely to create headwinds for the primary market as well,” said Sunil Damania, chief investment officer of Marketsmojo Asset Management.

Other companies with lockups expiring are Swiggy Ltd., Niva Bupa Health Insurance Co. and Acme Solar Holdings Ltd., according to Nuvama Alternative.