Shares of NTPC Green Energy cracked 9% to hit their new 52-week low of Rs 96.20 on the BSE on Monday, February 24, as its 3-month shareholder lock-in period expires today, freeing up 183 million shares to trade in the open market.This development means that nearly 183 million shares of NTPC Green Energy, which were previously restricted and could not be sold, are now eligible for trading. According to a report by domestic research firm Nuvama Alternative & Quantitative Research, these unlocked shares represent approximately 2% of the company’s total outstanding shares.A three-month share lock-in period refers to a specific duration of three months during which certain shareholders are restricted from selling or transferring their shares in the stock market. This restriction is often imposed following an initial public offering (IPO) to prevent a massive sell-off that could destabilize the stock price.Typically, lock-in periods last for about six months, but in some cases, they can extend up to a year. This restriction ensures that major investors, such as company promoters and anchor investors, hold onto their shares for a specified period, allowing the company to establish stability and maintain long-term growth.During the lock-in period, certain categories of shareholders, including company insiders, employees, and early investors, are not permitted to sell or trade their shares in the open market. This restriction helps to stabilize stock prices by preventing a sudden flood of shares from entering the market immediately after an IPO or other similar events, which could cause excessive volatility and significant price fluctuations.Once the lock-in period comes to an end, shareholders are free to sell their shares. This often results in a temporary increase in selling pressure as a large volume of shares becomes available in the market, which can lead to a decline in the stock price in the short term. However, the long-term impact depends on investor sentiment and market conditions.Also read: Promoters cashing out? 10 companies witnessing largest stake sales in Dec quarter(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)