Stock Market
What does one mean by Lock-in?
Lock-in indicates a freeze on the shares. SEBI (DIP) Guidelines have stipulated lock-in requirements on shares of promoters mainly to ensure that the promoters or main persons who are controlling the company, shall continue to hold some minimum percentage in the company after the public issue. The requirements are detailed in Chapter IV of DIP guidelines. There is lock-in on the shares held before IPO and also on shares acquired through preferential allotment route. However there is no lock- in on shares/securities allotted through QIP route.
Advertisement
More from this specialization
- Is it compulsory for me to have a Demat Account?
- What is a Draft Offer document?
- What did the S&P 500 close at yesterday?
- Who is a more senior creditor, a bondholder or stockholder?
- How has your portfolio performed in the last five years?
- Why would a company distribute its earnings through dividends to common stockholders?