Star Health To Tega Industries: 12 Firms To Face Anchor Investor Test In January
When the lock-in for anchor investors ends, the stock usually faces volatility.
As many as 12 firms will face the anchor investor test in January after the regulatory lock-in on sales of shares allotted to such buyers expires.
Unraveling of the 30-day SEBI-mandated lock-in for anchor investors will begin with Rakesh Jhunjhunwala-backed Star Health & Allied Insurance Co. and Tega Industries Ltd. on Jan. 7, Edelweiss Alternative Research said in a report. The two are among the dozen firms that raised around Rs 16,800 crore through public offers in December.
Anchor investors are large institutions roped in to generate demand ahead of an initial public offering. The shares allotted to these investors are locked in for a month from the listing day. When the regulatory leash loosens, the stock usually faces volatility. According to Edelweiss, they witness selling pressure over the five-day period after the lock-in ends.
Nearly 70% of the firms that listed in November logged declines of 7% over a five-day period since the lock-in expired in December.
Stocks with higher anchor allocation, Edelweiss said, experience higher selling pressure near the end of lock-in. Of the 12 firms, five have anchor allocation at more than 10% of the outstanding shares.