Lock Up Release For Free

The purpose of a lock-up agreement is to prevent company insiders from dumping their shares on new investors in the weeks and months following an IPO.

IPO trading starts with the market opening time on listing day. Therefore you can't sell prior to this moment. Hence IPO shares can be sold at or after the beginning of the normal trading session on listing day.

The lockup period prevents individuals who already hold shares in the company, whether it be as an early investor or as an employee of the company, from flooding the market with shares.This sudden increase in the supply of shares available to trade can push the stock lower.

Sebi said the existing lock in of 30 days will continue for 50% of the portion allocated to anchor investors and for the remaining portion, a lock-in of 90 days from the date of allotment will be applicable for all issues opening on or after 01 April, 2022.

Following the expiration of the lock-up period, restrictions preventing a company's employees and other major shareholders from selling their stock are lifted. Lock-up expirations often coincide with a 1-3% drop in the company's stock because of the increased number of available shares in the company.

Sebi said the existing lock in of 30 days will continue for 50% of the portion allocated to anchor investors and for the remaining portion, a lock-in of 90 days from the date of allotment will be applicable for all issues opening on or after 01 April, 2022.

A lock-up period is designed to stop early investors and insiders from selling their shares for a set period once a company completes an initial public offering (IPO), helping to minimise selling pressure in the early stages of life as a publicly-traded business.