Lock-in period

A lock-in period means that the promoters, shareholders, investors and executives of the company are not allowed to sell their shares during a certain period of time. During this period, they cannot sell their shares.

There are different types of investors in an IPO, such as anchor investors, QIBs, NIIs and retail investors.

Anchor investors are those who buy the shares a day before the IPO for the general public. They have a lock-in period of 90 to 180 days.

In this example,TBO Tek IPO Anchor Investor you can see the proportion size of Anchor Investors and Lock in period. 

TBO Tek IPO Anchor Investors Details

TBO Tek IPO raises Rs 696.51 crore from anchor investors. TBO Tek IPO Anchor bid date is May 7, 2024. TBO Tek IPO Anchor Investors list

SEBI’s proposed norms:

• 50% of the shares allotted in the anchor investor category have 90 days of the lock-in period. (Earlier the lock-in period for anchor investors was 30 days.)

• The lock-in period for non-promoters is 6 months. Earlier, it was 1 year.

• Promoters are required to lock in a minimum of 20 per cent of the post-issue paid-up capital for 18 months from the date of allotment in the IPO.

The lock-in period aims to stabilize the share price and showcase faith in the company's future growth. A longer lock-in period for anchor investors can strengthen investor confidence.

Shareholders can sell their shares once the lock-in period expires.