Shares of Life Insurance Corporation of India (LIC) hit a fresh record low of 682 on the BSE in opening deals as the 30-day lock-in period for anchor investors ends 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 have the obligation 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 to retail and other investors and have to commit to holding their shares for a certain period after listing.
The 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's 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 were listed on the stock exchanges at a 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 the LIC share price. People will take time to understand the fundamentals of LIC. "DIPAM secretary Tuhin Kanta Pandey will look into all these aspects and will raise the shareholders' value," said DIPAM secretary Tuhin Kanta Pandey.
In its first earnings release post share listing, LIC posted a 17% decline in consolidated net profit to 2,409 crore for the fourth quarter ending March 2022, down from 2,917 crore in the same quarter a year ago.
Anchor investors oversubscribed a day before the LIC IPO, which 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.