The lock-in period of 30 days for anchor investors in LIC is ending today i.e. on June 13. After which they will be able to sell their shares.
LIC Stock Price: Today i.e. on June 13, there is a big decline in the shares of insurance company LIC. Today the stock is down for the 10th consecutive day and it has broken down to a price of Rs 682. The stock had closed at Rs 710 on Friday. The stock has been declining since its listing and is making record lows every day. Now the stock is now trading 28 percent weaker than its issue price ie IPO price. Today, investors have feared a big fall in the stock because the lock-in period of 30 days for anchor investors is coming to an end. After which they will be able to sell the shares.
Anchor investors will be able to sell shares
The lock-in period of 30 days for anchor investors is ending today i.e. on June 13. Now now they too will be able to sell their shares. The apprehension is that after the end of the lock-in period for anchor investors, the fall in the stock will increase further. Today, in this fear, there has been a big fall in the stock. The stock also went below Rs 700 and made a record low of Rs 682. Let us tell you that before the IPO, anchor investors had bought 5.93 crore shares of LIC at a price of Rs 949. Most of these were mutual funds, which are incurring significant losses in stocks.
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1.66 lakh crore of investors drowned
Investors in the stock are continuously losing and since the listing they have suffered a setback of 1.66 lakh crores. The market cap of LIC has come down to 4.34 lakh crores in today’s business. Last week on Friday it was 4.50 lakh crore, on Wednesday it was 4.68 lakh crore and on Tuesday it was closed around 4.76 lakh crore. That is, it is continuously decreasing. At the same time, the valuation of the company was estimated at 6 lakh crores during the IPO. In this context, till now the investors of LIC have suffered a setback of 1.64 lakh crores.
What do experts say
Swastika Investmart Ltd. Head of Research, Santosh Meena says that the fall in LIC shares is an opportunity to invest from the current price. There is no concern with the stock in the long term. Anyway, insurance is a long term business, so the benefits of wealth development and compounding will accrue over time. It is trading on the first day after the 30-day anchor investor’s lock-in period is over. Today’s fall in the stock can become a strong support level for it. LIC fundamentals are strong and this is a good time to buy on the downside. He says that the potential for huge growth in the insurance sector in India is huge. According to the population, still very few people have insurance products. In such a situation, the company will get the benefit of sector growth.
However, the concern with LIC is that it is losing market share to private insurance companies. The company’s profitability is low as compared to private insurance companies, while revenue growth is also sluggish. Low VNB margins and short term persistency ratio are also a matter of concern.
