Monday, October 09, 2023 - The imminent conclusion of post-IPO lock-in periods for 17 companies, including several anchor investors, is set to bring changes to the market landscape this month, according to Nuvama Institutional Equities. The termination of these lock-in periods often triggers market volatility due to the subsequent liquidation by private equity and institutional investors.
Among the notable instances is Restaurant Brands (NYSE:QSR), which will see the end of a two-year lock-in period on 20% of promoter equity on Tuesday. According to InvestingPro data, Restaurant Brands, with a market cap of 46.02B USD and a P/E ratio of 24.58, has shown a promising revenue growth of 13.36% LTM2023.Q2. Moreover, InvestingPro Tips suggests that the company has a high earnings quality, with free cash flow exceeding net income, and has consistently increased its earnings per share. These factors could influence investor decisions as the lock-in period ends.
Another significant case is Tracxn Technologies, where a one-year lock-in period on a substantial 38% stake is set to conclude next Wednesday. Tracxn Technologies, as per InvestingPro data, has a market cap of 28.2B USD and a P/E ratio of 18.8. It has demonstrated revenue growth of 10.59% LTM2023.Q2 and a notable gross profit margin of 40.03%. Interestingly, the company has a perfect Piotroski Score of 9 and yields a high return on invested capital, as per InvestingPro Tips. These insights could be a key consideration for investors as the lock-in period concludes.
These events come at a time when there's been a recent surge in IPO activity, as evidenced by 14 new launches in the previous week. The lock-in periods that are ending span varied durations. Half of the anchor investors' shares are subject to 30-day and 90-day lock-ins, while extended periods reach up to two years in certain cases. This variance in lock-in durations adds another layer of complexity to the potential market impact.
The end of these lock-in periods could catalyze significant shifts in the market due to potential liquidation by private equity and institutional investors. As such, market participants will likely be closely watching these developments over the coming weeks. For more insights and tips like these, consider subscribing to InvestingPro, which offers a wealth of additional tips and real-time metrics to help you make informed investment decisions.
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