Bajaj Housing Finance shares drop over 5% as IPO lock-in period ends

The IPO lock-in period refers to a fixed period after a company's initial public offering (IPO) during which a certain set of shareholders, promoters, and insiders are restricted from selling their shares. 

After the lock-in period expires, these shareholders become eligible to offload their shares in the company.

The purpose of the lock-in period is to stabilise the stock price and reduce the risk of large-scale sell-offs. The lock-in period typically lasts six months but can extend up to a year, as per reports. 

As per reports, Bajaj Housing Finance will see the lock-in period end for 126 million shares, and again on December 12, 2024, for the same number of shares.

Types of lock-in periods

The lock-in requirement for allotment exceeding 20% of the post-issue paid-up capital is reduced to six months from the earlier one year. The lock-in period for non-promoters has also been reduced to six months from one year.

Once a lock-in period for a particular class of investor ends, those investors can then sell the shares they own in the company.

Bajaj Housing Finance listing

Shares of Bajaj Housing Finance made a solid market debut on September 16 and ended with a huge premium of nearly 136% against the issue price of ₹70.

The stock listed at ₹150 on the BSE and NSE, reflecting a jump of 114.28% from the issue price, in a much-awaited listing.

It zoomed 135.7% to settle at ₹164.99 -- its upper circuit limit -- on the BSE.

On the NSE, shares of the firm surged 135.71% to settle at the upper circuit limit of ₹165.

The ₹6,560-crore initial public offer of Bajaj Housing Finance Ltd received 63.60 times subscription on September 11, the last day of bidding, amid overwhelming participation from institutional buyers.

The initial share sale had a price band for the offer at ₹66-70 per share.