LIC share price falls to new low as anchor investors' lock-in ends today
2 min read 13 Jun 2022, 09:22 AM ISTLIC share price has fallen sharply since its listing on the stock exchanges on May 17, 2022
PremiumShares of Life Insurance Corporation of India (LIC) hit fresh record low of ₹682 on the BSE in opening deals as the 30-day lock-in period for anchor investors end today. Anchor investors, who bought over 59 million shares, can sell their shares in the open market from Monday.
In most cases, selling pressure persists over the day as anchor investors no longer are bounded to remain invested in these companies after the mandatory lock-in period.
Anchor investors are high-profile institutional investors that are allotted shares before the subscription opens for retail and other investors, and have to commit to holding their shares for a certain period after listing.
Norwegian wealth fund Norges Bank Investment Management and the Government of Singapore were among the subscribers to the anchor book. Alongside other global funds, domestic mutual fund houses such as HDFC mutual fund, SBI, ICICI and Kotak also came in as anchor investors who subscribed to LIC IPO.
LIC share price has fallen sharply since its listing on the stock exchange on May 17, 2022. LIC shares were allotted to the investors at ₹949 apiece and got listed at the stock exchanges at discount. The stock is about 25% down from its IPO issue price of ₹949.
The government on Friday said it is 'concerned' about the temporary dip in the insurance giant's stock price and assured that the insurer's management will look into these aspects and raise shareholders' value.
"We are very concerned about the temporary blip in LIC share price. People will take time to understand (fundamentals of) LIC. LIC management will look into all these aspects and will raise the shareholders' value," said DIPAM secretary Tuhin Kanta Pandey.
In its first earnings release post shares listing, LIC posted a 17% decline in consolidated net profit to ₹2,409 crore for the fourth quarter ending March 2022 from ₹2,917 crore in the same quarter a year ago.
“LIC, At current price it can be accumulated with at least 3 years perspective. It will remain under pressure for some more time as anchor investors will be free to exit after 16th June. But considering the relative cheap valuation at lower levels it will find interest from domestic retail and HNI investors. Institutional investor will wait for some more time before they start buying it," said Prasant Bhansaali, Director - Mehta Equities Ltd.
Anchor investors oversubscribed a day before the LIC IPO that opened for subscription from May 4 to May 9. The government raised ₹20,557 crore by diluting its 3.5% stake in the LIC through the initial share sale, the country's biggest ever.
