Street brokers will be watching closely whether the institutional investors, who make up the anchor portfolio, will stay invested or make a profit and return home. Paytm, Policybazaar, Nykaa, and a few other recent IPO stocks face their first stock price stress test this month when major investors are allowed to sell their stakes.
Most stocks listed at a significant premium over their respective issue prices in November in a booming IPO market. But major investors lock in ten of those stocks are expected to open in December after 30 days. Brokers will be watching closely whether the institutional investors, who make up the anchor portfolio, will stay invested or make a profit and return home.
The first stock to see its Anchor Book blocking period ends on Wednesday was Nykaa. The budget of Nykaa shares was swinging after the one-month lock-in period for shares allotted to anchor investors in the public issues that ended Wednesday. Nykaa had risen around Rs 2,400 crore by selling over 2 crore shares to 174 anchor investors before the issue opened. Its shares declined as much as 5 percent to Rs 2,028, but later recouped much of the losses.
The ending of the lock-in period does not mean all the anchor investors will sell out. But technically, all shares allotted to anchor investors can come into the system, increasing the supply of shares available. Some traders short sell just before the lock-in ends, hoping to buy back the shares if it declines due to selling by anchor investors. But if anchor investors do not sell the shares, the stock will rebound quickly. Sustained weakness from the last day onwards of the lock-in could mean some anchor investors have decided to sell.
Fino Payments Bank anchor lockdown period ended today, December 9. Unlike Nykaa, Fino Payments Bank’s share price fell 2.2% on Thursday. The anchor book portion of the IPO accounted for 11.2% of total shares outstanding. The Fino share price is down compared to the IPO price.
The anchor lockdown of PB Fintech, the parent company of Policybazaar, will end on Monday, December 13. Policybazaar’s share price is currently trading at Rs 1,139 per share, up from the IPO price of Rs 980 each. The Anchor Party owns 5.8% of the total outstanding shares of the company. Sigachi Industries anchor part lockdown will end with Policybazaar next Monday. Sigachi is one of the most successful recent announcements on Dalal Street. The share was listed at a premium of 267% over the IPO price. Currently, it is trading over 150% above the IPO price.
One 97 Communications or Paytm will see their anchor part unlocked next week on December 15th. The largest-ever IPO on Dalal Street had opened at a discount and continues to trade more than 20% below its IPO price of Rs 2,150 per share. The Sapphire Foods anchor portion will be unlocked on December 16th. Up to 12.4% of the total outstanding shares of the company are part of the anchor book. Sapphire Foods had listed a lukewarm premium at the IPO price of Rs 1,180 per share. Currently, it is trading at Rs 1,191 per share. Examined and pointed out so far that this year 76% of IPOs have slipped on the day the anchor lockout period ends. “In most cases, selling pressure persists the day after the anchor opened: up to 61% of issues fell by 2.2% the day after the anchor opened. And after five days from the anchor opening date, 61% of issues traded down 3.9%,” they added.