Definition
Anchor Lock-in
Anchor lock-in is the mandatory period for which anchor investors must hold their IPO shares before they can sell.
SEBI introduced a staggered lock-in for anchor investors to reduce post-listing volatility. Half of an anchor's allotted shares are locked in for 30 days from the date of allotment, and the remaining half for 90 days.
This rule, tightened in 2022, stops anchors from dumping shares immediately on listing and forces them to retain skin in the game. The expiry of the 30-day and 90-day windows is watched closely by traders, as large anchor unlocks can pressure the share price.
Related terms
- Anchor InvestorAnchor investors are large institutional investors who are allotted IPO shares a day before the issue opens to the public, lending credibility to the offering.
- Listing DayListing day is the first day an IPO's shares are admitted to trading on the stock exchange.
- Promoter Lock-inPromoter lock-in is the period after an IPO during which promoters cannot sell their shares, ensuring they retain skin in the game.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.