As Anchor Investors’ lock-in period expires today, the LIC share price falls to a new low

As the 30-day lock-in period for anchor investors expires today, shares of Life Insurance Corporation of India (LIC) hit a new record low of Rs 682. Anchor investors who purchased more than 59 million shares will be able to sell them on the open market starting Monday.

In most situations, selling pressure lasts throughout the day because anchor investors are no longer obligated to stay engaged in these companies once the obligatory lock-in time has expired.

Anchor investors are high-profile institutional investors who are given shares before retail and other investors can buy them and must promise to keeping them for a set amount of time after the company is listed.

The anchor book’s subscribers included the Norwegian wealth fund Norges Bank Investment Management and the Singapore government. Domestic mutual fund firms including as HDFC Mutual Fund, SBI, ICICI, and Kotak joined in as anchor investors who subscribed to the LIC IPO with other global funds.

Since its initial public offering on the stock exchange on May 17, 2022, the LIC share price has plummeted. Investors were given LIC shares for Rs 949 each, and they were listed on stock exchanges at a discount. The stock is down around 25% from its initial public offering (IPO) price of Rs 949.

The government expressed its “worry” about the temporary drop in the stock price of the insurance behemoth on Friday, promising that the insurer’s management will look into these issues and increase shareholder 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 results release since becoming public, LIC reported a 17 percent drop in consolidated net profit to 2,409 crore for the fourth quarter ending March 2022, down from 2,917 crore a year ago.

The LIC IPO, which was open for subscription from May 4 to May 9, was oversubscribed a day before it opened for registration. The government raised a total of 20,557 crore by diluting its 3.5 percent ownership in the LIC through the country’s largest-ever first share sale.