Pre-IPO investors and promoters may sell shares worth Rs 20,000-25,000 crore in November and December, with 12-14 companies with lock-up periods expiring. However, some promoters and private equity (PE) funds may still need to sell their stake, given the current market prices of many stocks are well below their IPO prices. Pre-IPO investors typically get their shares 25-30% below the IPO price.

Gopal Agarwal, head of investment banking at Edelweiss Financial Services, estimates that stocks with around Rs 8,000-12,000 crore could be listed in the next two months, with many investors on the sidelines.

“If a company has 4 to 5 investors selling simultaneously, and there is not enough demand from other institutional investors, that can be a challenge. Companies that were priced well at the IPO stage and are now trading above the issue price may exit their investments,” Agrawal said.

Pranav Haldea, managing director of Prime Database, thinks it is highly unlikely that the promoter will sell the shares because the market will view it negatively. “Most of these sponsors are well-intentioned and long-standing. However, in some cases, PE and VC may have urges to pull out,” Haldea said.

Dara Kalyaniwala, executive director of PL Capital Markets, said some investors might take advantage of the lower prices for tax planning and stock sales. Some deep-pocketed pre-IPO investors and founders may want to monetise their stock. “Some investors may want to book profits to offset losses from other companies,” he explained.

Market watchers note that demand for new-age tech stocks could increase if prices fall further and valuations become attractive. “Even promoters may turn to buyers if their company’s price falls significantly,” Kalyaniwala said.

For offerings that began in April this year, the lock-in period for pre-IPO investors in all classes has been shortened to six months from the acquisition date. Previously, investors had a one-year lock-in period before listing. For promoters, a maximum of 20% of post-issuance paid-in capital must be locked for 18 months; the previous three-year rights issue lock-in period of more than 20% of post-issuance paid-in capital has been reduced to 6 months. The lock-in period for anchor investors is: 50% of the shares allocated to them are locked for 30 days, and the remaining 50% is locked for 90 days.