lic: LIC sinks 6% to new low on fears of anchor sales


MUMBAI: The stock price of recently listed life insurance major LIC crashed nearly 6% in Monday’s weak market after the one-month post-listing lock-in for anchor investors in its initial public offer (IPO) ended. This triggered fears among other investors that these large institutions, already deep in the red, may now sell to cut their losses.
Since its IPO, the stock has lost nearly 30% of its value from its offer price of Rs 949. On Monday, it broke below the Rs 700 mark and, in late session after dipping to a new life-low of Rs 667 on the BSE, closed at Rs 668. In the IPO, its policyholders had got a per-share discount of Rs 60 while the retail investors got a Rs 45 discount.
After Monday’s crash, LIC’s market capitalisation has fallen to about Rs 4. 2 lakh crore, down from Rs 5. 5 lakh crore on May 17, the day it was listed. In less than a month, LIC’s investors have lost about Rs 1. 8 lakh crore worth of wealth from its IPO price (about Rs 6 lakh crore valuation), translating into about $17 billion. This makes LIC the second-worst IPO of 2022 in Asia in terms of losses, behind LG Energy that has lost about $22 billion, a Bloomberg report said.
At the IPO size of a little over Rs 21,000 crore, the LIC offer is the biggest ever in India. It’s also the largest ever government divestment offer.
Strong selling in the insurance giant emerged on Monday as fears among shareholders grew that anchor investors, a select group of big institutional investors who were allotted shares before the IPO opened on May 4, may offload large chunks of their holdings to cut losses.


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