Key reasons for the lock-in period for Anchor investors:
- Prevents quick selling after listing: Lock-in ensures that anchor investors cannot immediately sell their shares on listing day, which could otherwise put pressure on the share price.
- Builds confidence for retail investors: When well-known institutions are locked in, it signals long-term commitment, giving retail investors more confidence in the IPO.
- Reduces listing-day volatility: Lock-in helps avoid sudden large sell-offs by big investors, leading to more stable price movement after listing.
- Encourages genuine participation: Only investors who believe in the company’s fundamentals are likely to invest if they know their money is locked in for a fixed period.
