Zerodha’s Nithin Kamath explains why tracking lock-in expirations is a must for IPO investors

Zerodha CEO and founder Nithin Kamath has cautioned retail investors to pay close attention to lock-in periods when investing in initial public offerings (IPOs), noting that sell-offs by large shareholders after the lock-in expiry could put pressure on stock prices.In a post on microblogging platform X, formerly Twitter, Kamath explained that when a company goes public, not all shareholders are allowed to immediately sell their shares. Certain categories of shareholders, such as promoters, early investors and employee stock option (ESOP) holders, are generally subject to lock-in restrictions that can range from 30 days to as long as 18 months.

These shareholders often have significant stakes, Kamath noted, and their eventual departure can have a material impact on a stock’s performance. “Since these are large shareholders, whenever they sell, there can often be a downward movement in the share price,” he said, highlighting a risk that retail investors may overlook when looking for newly listed shares. Against this backdrop, he advised investors to monitor the lock-in expiration date as part of their investment decision-making process, especially when purchasing shares of recently listed companies.

To be fair, Nuvama data shows that between January 6 and April 30, 2026, shareholder listing lock-in periods will expire for 96 companies, covering shares valued at approximately $45 billion. While this represents the total value of the shares eligible for trading, it does not mean that all of them will be put up for sale as a significant portion is owned by promoters and promoter group entities.

In addition, Kamath, who regularly shares insights on the platform, also highlighted the structural limitations of the brokerage. In a January 6 message, he said the 15% open interest (OI) limit at the brokerage level imposes a hard ceiling on the extent to which a brokerage firm can grow and the pace of that growth. While the restriction limits scale, he added, it ultimately benefits consumers by reducing concentration risk and preventing any single broker from becoming too dominant.

Kamath called real estate brokerage a “unique business” and offered a glimpse into the regulatory framework governing the industry. “Broking is a unique business because there is a hard ceiling on how much we can grow and the speed at which we can grow. What most people don’t realize is that SEBI has set an open interest (OI) limit of 15% at the broker level,” he wrote on his official X-handle on Tuesday.

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