Share price LIC on Monday: Shares of Life Insurance Corporation of India (LIC) hit a new all-time low of Rs 682 on the BSE on deal opening as the 30-day lock-in period for anchor investors ends today. The LIC share fell 4 percent in opening trades. It fell for the 10th consecutive trading day and is down 19 percent during the period. With this, LIC has lost Rs 1.2 lakh crore market cap since its listing.
Anchor investors, who collectively bought nearly 59.3 million shares a day before the IPO opened for subscription at Rs 949 each, will be able to sell their shares on the open market from Monday. Anchor investors are leading institutional investors to whom shares are allocated prior to the opening of subscription to retail and other investors and must commit to hold their shares for a specified period of time after listing.
Norwegian equity fund Norges Bank Investment Management and the government of Singapore were among the subscribers to the anchor book. In addition to other global funds, domestic mutual funds such as HDFC mutual funds, SBI, ICICI and Kotak also came in as anchor investors signing up for LIC IPO.
Analysts expect a further correction in the stock and they believe the low on the first day of trading after the lock-in period may support fundamentally healthy business.
Arijit Malakar, Head of Research – Retail, Ashika Group, said: “The LIC share price is under pressure as the lock-in period for regulatory anchor book investors has come to an end. Since its listing, LIC’s share price has continued its downward trend amid a volatile stock market and lukewarm investor sentiment towards PSU companies. The company is expected to continue to suffer as it loses market share as it is unable to move up the customer segment by significantly changing its product and distribution mix. However, it must be remembered that life insurance is a long-term business and has huge growth potential given its low penetration compared to other countries. Furthermore, LIC has competitive advantages such as a strong brand name, a huge network of agents and sound financial data that could drive long-term growth.”
The price of the LIC share has fallen sharply since its listing on the stock exchange on 17 May 2022. LIC shares were allotted to the investors at Rs 949 each and were listed on the exchanges at a discount. The stock is about 28 percent lower than the IPO offering price of Rs 949.
Manoj Dalmia, founder and director of Proficient Equities Limited, said: “LIC is down more than 25 percent since its listing. Investors should wait for some consolidation before seeing a reversal. If the stock continues like this, it could falling further to Rs 634 levels.
The government said on Friday it was “concerned” about the temporary dip in the insurance giant’s share price, and assured the insurer’s management would look into these aspects and increase shareholder value.
“We are very concerned about the temporary fall in the LIC share price. People will take the time to understand (basic principles of) LIC. LIC management will look at all these aspects and increase shareholder value,” said DIPAM Secretary Tuhin Kanta Pandey.
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