LIC Shares Plummet Below Rs 675, Down 29% From Issue Price; Govt ‘Concerned’

Since listing, LIC shares have stayed below the issue price.

2 min read
Hindi Female

Woes for Life Insurance Corporation's stocks continued as prices crashed to below Rs 675 per share, with the 30-day anchor lock-in set to end on Monday, 13 June.

As the stock price falls for the 10th consecutive trading day, LIC has lost Rs 1.2 lakh crore in market capitalisation since its initial listing on 17 May.

The insurance giant’s shares fell to an all-time intra-day low of Rs. 673, and was trading at Rs 673.70, almost 5 percent lower than Friday’s record low close of Rs 709.70.

Anchor investors, who collectively bought almost 59.3 million shares before the IPO opened for subscription, are high-profile institutional investors and will be allowed to sell their shares in the open market from Monday.

An anchor investor commits to holding their share for a particular period after a stock is listed, are allotted shares before retail and other investors are allowed to purchase shares.

With the stock down almost 29 percent lower than its issue price of Rs 949, the government on Friday, 10 June expressed its concern about the drop in valuation, calling it a temporary ‘blip’ and said that LIC’s management will analyse various factors and raise shareholders’ value.

"We are very concerned about the temporary blip in LIC share price. People will take time to understand (the fundamentals of) LIC. LIC management will look into all these aspects and raise the shareholders' value."
Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM)

Since the day of listing, LIC shares have remained below the issue price and had touched a low of Rs 708.70 and a high of Rs 920.

The government had garnered about Rs 20,500 crore through sale of 3.5 per cent stake in LIC via an IPO last month.

India's largest Initial Public Offering ever at Rs 21,008 crore, was subscribed to 2.95 times, with the government lowering the planned dilution from 5 percent to 3.5 percent due to adverse market conditions.

Moreover, LIC's valuation was drastically reduced from earlier estimates of Rs 12 trillion to just Rs 6 trillion.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

Speaking truth to power requires allies like you.
Become a Member
3 months
12 months
12 months
Check Member Benefits
Read More