Nykaa, Paytm, Policybazaar IPO lock-in period ends soon: Check dates and analysts’ outlook

Nykaa, Paytm, Policybazaar lock-in period: The next few weeks in November are very eventful for the new-age tech startup space, as the IPO lock-in period ends for Nykaa, Paytm and Policybazaar among others. According to analysts, it's a key test for this new age tech space as the lock-up period on $14 billion worth of shares sold in initial public offerings expire, allowing major investors such as Warren Buffett and Masayoshi Son to sell their stakes. The table below shows the lock-up expiry date, and the return the stock has given in the year so far. 

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Nykaa, Paytm, Policybazaar lock-in period: Dates

What is the rule for lock-in periods?

According to SEBI rules, a 1-year lock-in period is necessary for pre-IPO investors, post listing of the shares. Since the lock-in period is ending in the next few days, there is a concern that leading investors will dump all or part of their holdings, after their poor run in the year so far. 

Who could sell the stake? 

Paytm: Paytm has lost more than 70% of its value since its IPO, which was backed by global investors including SoftBank Group Corp, Warren Buffett’s Berkshire Hathaway Inc. and Jack Ma’s Ant Group. Analysts say that the stock may come under pressure after Nov. 15, as $4.3 billion worth of shares get unlocked, giving the investors an exit route.

Policybazaar, Delhivery: Interestingly Policybazaar has lost nearly 60% stake in the year so far, while Delhivery is down 27%. Softbank was an early investor in Delhivery and PolicyBazaar owner PB Fintech as well. Analysts say that Softbank could book some profits in these stocks as well (as it was an early investor). 

The overall environment for these new-age tech stocks remains challenging due to the rising interest rate environment. Given that the road to profitability for many of these companies remains uncertain, analysts say that the stocks could come under pressure once the lock-in period ends.