The Finance Ministry on Monday expressed grave concern over the share price of Life Insurance Corporation (LIC) after it hit a record low amid an overall market crash on weak global cues and worries about India’s upcoming retail inflation data for May.
Shares LIC was trading 5.66 per cent lower at Rs 669.50 apiece on BSE during late trading hours as the lock-in period for anchor investors in the country’s largest initial public offering (IPO) ended today. Sentiments around the stock were also weak as the equity market tanked in early trade.
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.
This was the tenth consecutive session when the stock traded lower. Since listing or in the last twenty sessions, the stock is up only for four sessions.
With this fall, the stock has now slipped to the sixth position in terms of market capitalization. At the time of listing, it was the fifth most valued firm in India with a market capitalization of Rs 6 trillion. The stock has eroded nearly Rs 1.7 trillion in investors’ wealth since its listing.
LIC Share Price Slope
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 on 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.
Anchor investors oversubscribed a day before the LIC IPO that opened for subscription from May 4 to May 9. The government raised ₹20,557 crores by diluting its 3.5% stake in the LIC through the initial share sale, the country’s biggest ever.
The country’s biggest insurer and the largest domestic financial investor’s market capitalization (m-cap) fell to ₹ 4.3 lakh crore on Monday. In less than one month of its listing, ₹ 1.7 lakh crore has been wiped out. At the issue price of ₹ 949, the company’s m-cap stood slightly over ₹ 6 lakh crore.
