{"id":14298,"date":"2026-05-27T07:40:59","date_gmt":"2026-05-27T07:40:59","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/ipo-lock-in-period\/"},"modified":"2026-05-27T07:40:59","modified_gmt":"2026-05-27T07:40:59","slug":"ipo-lock-in-period","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/ipo-lock-in-period\/","title":{"rendered":"IPO Lock-in Period"},"content":{"rendered":"

IPO lock-in period<\/a> is the mandatory period after listing during which certain shareholders<\/a> are restricted from selling their shares<\/a>. SEBI<\/a> mandates lock-in to prevent promoters and pre-IPO<\/a> investors from immediately exiting after listing, which could destabilise the share price.<\/p>\n

What Is the IPO Lock-in Period?<\/h2>\n

After an IPO, not all shareholders can sell their shares immediately. SEBI imposes lock-in restrictions on:<\/p>\n

– **Promoters’ minimum contribution**: locked in for 18 months from the date of allotment (reduced from 3 years post-2021 SEBI reforms)
\n– **Remaining promoter holding**: locked in for 6 months from allotment
\n– **Anchor investors<\/a>**: locked in for 30 days from allotment
\n– **Pre-IPO shareholders (VC, PE, pre-IPO placement holders)**: locked in for 6 months from allotment<\/p>\n

Public shareholders (those who received allotment in the IPO) are not subject to any lock-in and can sell from listing day itself.<\/p>\n

Why Lock-in Matters<\/h2>\n

Lock-in protects retail investors from:<\/p>\n

– Promoters “pumping and dumping” shares immediately after listing
\n– Institutional investor<\/a>s who got in at pre-IPO valuations flooding the market with cheap shares on listing day
\n– Artificial price discovery distorted by large insider selling<\/p>\n

Lock-in Period After SEBI’s 2021 Reforms<\/h2>\n

SEBI reformed lock-in rules in 2021:<\/p>\n

– Promoters with minimum 20% contribution: 18 months lock-in
\n– Promoters holding above minimum contribution: 6 months lock-in
\n– This replaced the older 1-year blanket lock-in<\/p>\n

Practical Example<\/h2>\n

A technology company lists after its IPO. The promoter holds 45% of post-IPO shares. SEBI rules require the minimum contribution of 20% to be locked for 18 months and the remaining 25% for 6 months. Six months after listing, the promoter can sell 25% of their shares. But the first 20% cannot be sold for 18 months.<\/p>\n

Key Takeaways<\/h2>\n

– IPO lock-in restricts promoters and pre-IPO investors from selling shares immediately after listing
\n– Promoters’ minimum contribution is locked for 18 months; remaining holding for 6 months
\n– Anchor investors face a 30-day lock-in; pre-IPO shareholders face 6 months
\n– Public IPO allottees have no lock-in and can sell from day one
\n– Lock-in protects retail investors from large insider selling immediately after listing<\/p>\n","protected":false},"excerpt":{"rendered":"

IPO lock-in period is the mandatory period after listing during which certain shareholders are restricted from selling their shares. SEBI mandates lock-in to prevent promoters and pre-IPO investors from immediately exiting after listing, which could destabilise the share price. What Is the IPO Lock-in Period? After an IPO, not all shareholders can sell their shares […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14298","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"IPO lock-in period is the mandatory period after listing during which certain shareholders are restricted from selling their shares. SEBI mandates lock-in to prevent promoters and pre-IPO investors from immediately exiting after listing, which could destabilise the share price. What Is the IPO Lock-in Period? After an IPO, not all shareholders can sell their shares…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14298\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}