The point
A lock-in period is a fixed stretch after an IPO during which certain shareholders are barred from selling. It binds promoters, investors who held shares before the IPO, and anchor investors. When it ends, their shares become sellable, which is a permission and not a sale. Nuvama Alternative & Quantitative Research counts about $14 billion of shares across 91 companies reaching that point, and most of it may never reach the market.
What is a lock-in period, and who does it bind?
It is a legal restriction on transferring specified shares for a set time after listing. It does not bind someone who bought shares in the IPO or on the exchange afterwards.
Corporate Professionals describes lock-in as a statutory restriction on the transfer of specified securities for a prescribed period following an IPO, set by the Sebi ICDR Regulations, 2018. It is a legal obligation on the holder, separate from any contract between the company and its shareholders (source: Corporate Professionals, IPO lock-in framework, read 2026-10-06).
Without it, the people who know the business best could sell everything on the day it lists. The restriction keeps promoters tied to the company while it settles into public markets. It also spreads out early supply, so insider selling does not dominate the first weeks of price discovery.
How long is each lock-in under the Sebi rules?
The period depends on who holds the shares. For a mainboard IPO, the commonly cited periods are as follows.
- Promoters, the minimum contribution: 20 percent of post-issue capital, locked in for 18 months. Capex-heavy issues and SME issues carry three years.
- Promoters, the rest: shares above that 20 percent are generally locked in for six months.
- Pre-IPO investors who are not promoters: six months, with exemptions for certain categories as the offer document discloses.
- Employees holding shares from a pre-IPO stock option or purchase plan: six months, unless exempt.
- Anchor investors: half of their allotment for 30 days and the other half for 90 days.
Source: Choice India, IPO lock-in period and Corporate Professionals above, read 2026-10-06. Each company's own offer document states its exact dates and any exemption.
Two details matter. Promoter shares sit in two buckets with separate periods, so "the promoter lock-in ends" can mean only the smaller bucket. And the clock starts from the IPO, not from the day you noticed the stock.
Why is the end of a lock-in permission, and not a sale?
Because a holder who may sell still has to decide to. The rule removes a bar, and a holder who stays put leaves supply unchanged.
The Economic Times report that prompted this piece makes the same point. Lock-ins in 91 companies are scheduled to expire between 5 October and 29 December 2026, with Nuvama estimating the opening at about $14 billion. The report adds a caveat. The figure is the total value of expiring shares. It does not mean the entire pool will hit the market (source: The Economic Times via inkl, read 2026-10-06).
Consider who holds the shares. A promoter who runs the company and wants to keep control usually has no reason to sell a large block. A venture investor with a fund that must return capital may have every reason to. An anchor fund that bought for a stable allotment may hold on or may book a gain at the first window. Choice India notes that early holders who bought at very low prices may use the first expiry to book profits. It calls this natural behaviour, not necessarily a red flag.
So the same headline number covers holders with opposite motives. The total sets a ceiling on supply and leaves open how much of it arrives.
What is an overhang, and how big can it be?
An overhang is a large block of shares that could be sold and has not been yet. Its size matters only against the shares already trading.
Take a company with 100 crore shares in issue. The public float, the shares that trade freely, is 25 crore. A lock-in ends on 15 crore pre-IPO shares.
- New sellable shares: 15 crore.
- Float before the expiry: 25 crore.
- Float after the expiry, if all were sold: 25 + 15 = 40 crore.
- Possible addition to the float: 15 ÷ 25 = 0.60, or 60 percent.
That is the ceiling. If holders sell 3 crore of the 15 crore, the addition is 3 ÷ 25 = 12 percent of the float. The company and the expiry stay the same while the outcome changes, because the ceiling is the worst case and the realised amount is the figure that matters.
Now put a holding to it. Three percent of a ₹1 crore portfolio is ₹3 lakh. If that sits in a recently listed stock, the expiry raises a question about the other side. Who might sell, and how much? No rule says the answer is "all of them".
What can a holder read before the date?
Three documents answer most of it, and all three are public.
- The offer document. It lists each locked-in bucket, its size and its end date. This is where an expiry date comes from, so a date on a watchlist is worth checking against it.
- The shareholding pattern. Listed companies file one with the exchange every quarter, and it shows how much the promoters, institutions and the public hold. A promoter group holding a large majority has fewer shares to sell into the market than one holding a minority.
- Exchange disclosures of bulk and block deals. After an expiry, a large sale by an early holder shows up here, which turns a guess about selling into something you can read.
None of these gives you a price. A lock-in expiry is a fact about supply on a date. What the price does is decided by demand on that date, by the company's results, and by the market around it. An expiry that moves a stock one year can pass unnoticed the next.
What a lock-in cannot tell you
A lock-in says nothing about whether a stock will fall or rise. Used as a signal in either direction, an expiry date asks one fact to do the work of many.
A plainer use works better. Before holding a recently listed company, check the date, check who holds the locked shares, and check the size against the float. Then decide as you would have anyway, on the business and your position size.
That is also the rule behind a published index. Qatobit's QSI indices rebalance on a stated methodology each month, so a change in holdings follows a written rule and not a headline or a chart pattern.
Two earlier pieces cover the IPO itself.
Start with what a QIB is in an IPO. Then read what an offer for sale means for the buyer.
Frequently asked questions
What is a lock-in period in an IPO?
It is a fixed period after listing in which promoters, pre-IPO investors, employee shareholders and anchor investors may not sell specified shares. The Sebi ICDR Regulations set the periods. Shares bought in the IPO or on the exchange are not locked in.
How long is the lock-in for promoters?
For a mainboard IPO, 20 percent of post-issue capital is locked in for 18 months, or three years for capex-heavy and SME issues. Promoter shares above that 20 percent are generally locked in for six months.
How long is the anchor investor lock-in?
Half of an anchor investor's allotment is locked in for 30 days and the other half for 90 days from allotment.
Does a lock-in expiry mean the share price will fall?
No. Expiry only lets the holder sell. Whether they do, and how much, depends on their reasons, and the price depends on demand at that time as well. The total value of expiring shares is a ceiling on supply, not a forecast of selling.
Where can I find a company's lock-in dates?
In the offer document, which lists each locked-in bucket with its end date. The quarterly shareholding pattern on the exchange shows who holds the shares.
Crypto investments are subject to market risk. Not financial advice.
“A better allocation begins with a better explanation.”
Qatobit principle
Published construction. Fixed cadence. Versioned control.
