LIC, 7 other firms in focus as anchor investors' lock-in period ends

Share price comes under pressure around the time when such a deadline is over, trend shows

The 30-day lock-in period meant for anchor investors in initial public offerings (IPOs) is set to end for eight companies that made their debut share sale in May.

In the past, share prices of companies have come under pressure around the time the anchor lock-in ends. This time around too downward pressure is evident. Shares of LIC fell for a fifth straight day on Thursday. The state-owned insurance behemoth’s share price is now down 24 per cent over its issue price. Further correction can’t be ruled out as the lock-in period on all its shares allotted to anchor investors ends on Monday. Anchor investors hold close to 1 per cent of the 3.5 per cent free float of LIC.

The 30-day anchor lock-in for seven other companies also ends between June 17 and June 30. However, in case of these companies, only half the shares allotted to anchor investors are free to be traded. The remaining half is subject to an additional 60-day lock-in, under the new rules introduced by market regulator Sebi in April.

An analysis by Edelweiss Alternative Research shows, anchor investors hold between 3 per cent and 13 per cent stake in these companies—the lock-in ends only on 50 per cent of these this month and remaining in August.