Lock-In Periods

3.1 — Sunrise Foods lists, and Meera can't sell a single share

The morning Sunrise Foods lists, Meera and Arjun's shares — worth far more on paper than the ₹6 lakh they started with — are suddenly, technically, tradeable. Except they aren't allowed to sell a single one. Neither is anyone else who owned a piece of the company before that morning.

If they could sell right away, the price would collapse under the weight of it — and the people who knew the business best would be cashing out at the expense of investors who'd owned it for an hour.

A lock-in stops exactly that. It's a period after listing during which shares that existed BEFORE the IPO can't be transferred. The freshly issued shares sold in the offer trade immediately. The old ones don't.

3.2 — The two rules, and who they apply to

It's a hierarchy of trust. Promoters control the company, so a slice of their holding stays locked for a year and a half. Everyone else who owned shares before the issue — early investors, employees, anyone else — gets released at six months. Anchor investors, from chapter 1, sit outside both rules entirely, under their own shorter lock-in.

3.3 — Same rule, two very different companies

The rule doesn't care how big the company is. Here it is on a ₹3,000 crore mainboard issue and on a small SME-platform one.

What actually happens on those dates is narrower than people expect. A block of shares that couldn't legally trade becomes eligible to trade. Nothing about the company itself changes. No announcement is required. The holders MAY sell — many simply don't, because unloading a large stake is neither easy nor cheap to do quickly.

3.4 — The honest catch: these dates aren't actually filed anywhere

This matters more than the arithmetic above it.

Neither the issuer nor the exchange publishes a lock-in expiry date. There's no filing that states it. Every date you'll ever see — here or anywhere else — is computed by applying the regulations to a starting date someone chose.

Small error, and it's stated rather than buried — the alternative was publishing a date that looks precise and is quietly wrong. If exact timing matters to you, the true allotment date sits in the company's own listing documents, a few days ahead of ours.

Worth noticing what that means: a lock-in date can never be looked up, only worked out. Any source presenting one as a plain disclosed fact has done this same computation and simply not told you.

3.5 — So does the price actually fall on that date?

The common belief is that an expiry means the price is about to drop. It's worth being precise about why that doesn't automatically follow.

An expiry changes eligibility, not intention. Shares that couldn't trade become permitted to trade — that's it. Nobody's forced to sell anything.

• ▹**The date is known years in advance.** It's fixed by regulation from the listing date. Anyone who wanted to react to it has had eighteen months to do so already.
• ▹**Promoters selling their minimum contribution would weaken their own control** — usually the last thing they want, and any real sale would be disclosed anyway.
• ▹**Big holders rarely sell into the open market at all.** A large stake typically moves through a negotiated block deal, which can happen on any date after expiry, not necessarily on it.
• ▹**Some early backers have wanted an exit for years.** For them, the expiry is simply the first chance — not a reaction to anything new.

3.6 — Where this sits on EquityTale, and what comes next

Every issue page shows both tranches with their expiry dates, the regulation each comes from, and the disclosure that they're computed from the listing date rather than filed by anyone.

Meera and Arjun's shares stay locked for eighteen months, and neither of them minds much. Arjun points out that nobody who spent a decade building something is in a hurry on the second Tuesday of May. By then, though, he's more curious about a different question entirely — how much of what he eventually sells he actually gets to keep.

That closes Module 4. Module 5 answers exactly that question: what tax does to money made from shares and funds, and the specific, surprising way it treats a monthly SIP.