Since the listing, the share prices of Life Insurance Corporation of India (LIC) have continued to fall. So far, its shares have fallen by more than 21 percent and it is expected that the price of its shares will fall further. At the same time, the lock-in period for the anchors in LIC’s IPO during the 10th session has ended, which means they can now sell their shares.
But the fall in the shares on Monday has added to the worries of anchor investors. Its shares have fallen by 5.85% on Monday, from the level of Rs 690 on the BSE, its shares have reached the level of Rs 668.20. The company’s stock, which was listed on May 17, has declined by 23.67% so far.
According to SEBI rules for anchor investors in IPO, they will be able to sell their shares only after one month after buying the shares of any company. This period has ended on 13th May and now anchor investors will be able to sell their shares. LIC shareholders have already incurred a loss of over Rs 1.5 lakh crore in less than a month since the listing.
Significantly, the shares of LIC were listed on May 17 at a price of Rs 872 per share. The government had fixed the issue price of LIC’s shares at Rs 949 after a successful initial public offering (IPO), which got nearly 3 times more subscriptions.
A day before the opening of its IPO on May 4, LIC had allotted shares worth Rs 5,627 crore to a large number of domestic investors such as mutual funds and insurance companies and some foreign funds. More than 70% of LIC’s anchor investors were domestic mutual funds. At the time of the IPO, the allotment of shares to retail investors was Rs 905 per share, while the allotment to policyholders was Rs 889 per share.