Definition
Anchor Lock-in Expiry
Anchor lock-in expiry is when the shares allotted to anchor investors in an IPO become free to sell, often creating selling pressure.
Anchor investors face a staggered lock-in: 50% of their shares unlock after 30 days from allotment and the rest after 90 days. When these expiries arrive, anchors may sell, creating an 'overhang' that can pressure a recently listed stock's price.
Investors in newly listed companies track the anchor lock-in calendar, sharp, news-less dips around day 30 or 90 are often anchor-selling rather than fundamental deterioration. It is one of several lock-in events that shape post-IPO price behaviour.
Related terms
- IPOAn Initial Public Offering is the first sale of a company's shares to the public, after which the stock lists and trades on an exchange like the NSE or BSE.
- 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.
- Lock-In PeriodThe lock-in period is the minimum span during which a ULIP's funds cannot be withdrawn or fully accessed, set at five years in India.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.