As a significant shift approaches in the Indian stock market, shares valued at Rs 2.2 lakh crore (approximately $26 billion) are set to become available for trading between April 30 and July 28. This surge is due to the expiration of the pre-listing lock-in period for promoters, anchor investors, and other stakeholders. A recent analysis by Nuvama Institutional Equities reveals that around Rs 1.26 lakh crore (about $15 billion) will be accessible for sale as early as May.

Increased Supply of Shares: What to Expect

The conclusion of the lock-in period could lead to a substantial increase in the number of shares available in the market. However, it’s essential to note that not all shareholders are likely to liquidate their stakes. Many long-term investors and promoters are expected to retain their investments despite the newfound selling opportunities.

• Swiggy’s lock-in expiration on May 13 could release 1,897.5 million shares held by non-promoters, amounting to Rs 60,013 crore.
• This potential influx marks one of the most considerable share releases in the upcoming month, with other companies like Sagility India, Niva Bupa Health Insurance, and Afcons Infrastructure following closely behind.

Recent Developments in the Stock Market

Last Friday marked the end of the lock-in period for anchor investors in Dr. Agarwal’s Healthcare, leading to the release of 247 million shares from various companies such as Deepak Builders & Engineers, Blue Jet Health, and Afcons Infrastructure. On Monday, an additional 64.8 million shares from Honasa Consumer were unlocked. Despite these developments, trading activity remained relatively muted, with some stocks experiencing slight losses while a few gained marginally.

Market Insights: What Analysts Are Saying

Sudeep Bandyopadhyay, Chairman of Inditrade Capital, anticipates selling pressure on the lock-in expiry day as many investors look to capitalize on their holdings. "The overall market response will hinge on broader market movements," he explains.

Bandyopadhyay predicts a range-bound market until June amid ongoing volatility, advising investors to tread carefully. Over the past month, both the Nifty and Sensex indices have seen gains exceeding 10%.

Stock Performance and Future Predictions

Siddarth Bhamre, Head of Institutional Research at Asit C Mehta, notes that many stocks approaching the end of their lock-in periods are currently trading below their issue prices. He suggests that future price movements will depend on the strategic opportunities these investors foresee. “While we may not witness immediate downward pressure, potential upsides will likely be constrained,” he adds, highlighting the varying impacts on different stocks.

Positive Trends in Indian Markets

Amid these developments, the Indian markets have shown robust activity, with foreign portfolio investors (FPIs) actively purchasing stocks. In April alone, FPIs bought shares worth Rs 4,223 crore, marking their return as net buyers for the first time in three months. This influx follows a series of net outflows totaling Rs 3,973 crore in March, Rs 34,574 crore in February, and Rs 78,027 crore in January, reflecting a shift towards a more optimistic market outlook.

As the stock market navigates these changes, investors are encouraged to stay informed and adaptable to the evolving landscape.