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LIC Shares Fall Below Rs 700 As Anchor Lock-In Ends; Lose Rs 1.2 Lakh Cr M-Cap Since Listing


LIC Share Price on Monday: Shares of Life Insurance Corporation of India (LIC) hit a fresh record low of Rs 682 on the BSE in opening deals as the 30-day lock-in period for anchor investors ends today. The LIC stock fell 4 per cent in opening trades. It slipped for the 10th straight trading day and has declined 19 per cent during the period. With this, LIC has lost Rs 1.2 lakh crore market capitalisation since listing.

Anchor investors, who collectively bought nearly 59.3 million shares a day before the IPO opened for subscription at Rs 949 apiece, can sell their shares in the open market from Monday. 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.

Analysts expect a further correction in the stock, and according to them, the low made on the first day of trade after the lock-in period may act as a support for a fundamentally sound business.

Arijit Malakar, head of research – Retail, Ashika Group, said: “LIC share price is under pressure as the regulatory anchor book investors lock-in period came to an end. Since the listing, LIC’s share price continued its downtrend against the backdrop of a volatile equity market and tepid investors sentiment toward PSU companies. It is expected that the company will continue to suffer as the company is losing market share owing to its inability to move up in the customer segment by significantly changing its product and distribution mix. However, one should remember that life insurance is a long-term business and has enormous growth potential given its low penetration compared to other countries. Further, LIC has competitive advantages like strong brand name, massive agents network, and healthy financials which could drive the growth in long run.”

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 Rs 949 apiece and got listed at the stock exchanges at discount. The stock is about 28 per cent down from its IPO issue price of Rs 949.

Manoj Dalmia, founder and director, Proficient Equities Limited, said: “LIC has fallen more than 25 per cent after listing, the anchor lock-in ending may cause further selling currently investors should avoid any heavy buying positions as there is no proper uptrend being seen. Investors should wait for some consolidation for some reversal to be seen.If the stock continues like this it may fall further till Rs 634 levels.”

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.

The views and investment tips by experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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