Zomato shares tumbled on Monday as investors scrambled to sell their shares after freezing all of its pre-IPO shares for a year. The stock closed at a new low of Rs 47.55, down 11.4% from its previous close. It was the second-biggest one-day sell-off since the listing.

Typically, selling pressure occurs whenever the lock-in period for IPO anchor investors ends. However, company shares are not uncommon to plummet after a one-year lock-in period ends.

Market participants attributed the selling pressure to Zomato’s atypical holding pattern. The company was the first major startup to go public, with no promoter holding a stake. The majority of its shares are held by private equity and venture capital funds, employees and founders (not promoters).

Shares worth nearly Rs 1,300 crore over the counter changed hands, six times the six-month average. However, the names of the shareholders who sold on Monday could not be identified. Shares of Zomato are down 37% from its IPO price of Rs 76 and 72% from its all-time high of Rs 169.

“The one-year pre-IPO lock-in period applies to all companies. This is to ensure some skin in the game. Promoters and founders typically don’t sell one year after the IPO. For companies without promoters, due to a diverse shareholder base, there may be more selling pressure when the lock-in period expires, just like after the end of the anchor period. Also, investor confidence has weakened recently due to market volatility, which may be one of the reasons for the sell-off at the end of the stock freeze,” Law Firm said Sudhir Bassi, executive director of Khaitan & Co.

The National Stock Exchange (NSE) informed investors about the end of the lock-up on Zomato shares in a notice on Friday.

Industry insiders say the trading model of Zomato stock could serve as a lesson for other startups whose one-year lock-in period ends later this year. Other startups such as PolicyBazaar, Nykaa and Paytm went public within months of Zomato’s IPO. Like Zomato, PolicyBazaar and Paytm have no “sponsors” and have diversified stakes. While Nykaa has a 52.4% promoter holding, PE funds and wealthy investors hold large stakes.

“An important purpose of locking-in securities held by pre-IPO shareholders is to protect the value of the shares from skyrocketing at the time of listing, providing a buffer for the interests of IPO subscribers and other shareholders. At the expiration of the lock-up period, investors can see Global economic factors and future prospects. With the current volatility in global stock markets and investor caution, some selling at the end of the lock-in period is natural, said Saurabh Tiwari, partner at DSK Legal.

The end of the pre-IPO lock-in is another source of volatility, given the current environment in which startup stocks are plunging from record levels.