In the last four trading sessions, LIC Not only has it lost its fifth most valuable company position, but its market cap has also been eroded to the tune of more than 77,600 crores against the IPO issue price.
LIC shares closed on Friday below 826.25 14.50 or 1.72% on BSE. Shares near their new 52-week low 825.05 each was seen earlier today.
LIC’s market cap remained at Friday’s closing price 5,22,602.94 crores. it is less than 77,639.06 crores against the issue price market cap of the IPO.
at the upper price band of 949 each in IPO, LIC’s market cap remained 6,00,242 crores.
LIC is listed on the stock exchanges in the large-cap category. On BSE, LIC is available for trading in the list of “A” Group Securities.
On BSE, LIC is listed at around 9% discount 867 against the upper price band of its IPO on May 17 949 per equity share.
On the first day, LIC reached its lifetime high, despite opening at a discount 920 on Dalal Street, however, has only since fallen in shares. The second day saw a flat investor response, but the third day saw heavy selling pressure in LIC shares, causing them to lose over 4%. However, on the fourth day, LIC recovered some of its previous losses but slipped around 2%.
Compared to its all-time high, LIC shares have lost over 10% till the end of Friday. As compared to its IPO upper price band, the shares of LIC have declined by over 13% as of today.
Due to a sharp sell-off, LIC lost its 5th most valuable company position on Thursday and was regained by FMCG giant Hindustan Unilever.
When LIC listed, it surpassed HUL to hold the fifth rank on BSE. But that has changed now!
As of May 20, LIC is now the 6th largest company in terms of market share, while HUL has its 5th rank by market cap. 5,46,397.45 crore.
However, LIC continues to be the largest insurer on the stock exchanges as compared to SBI Life Insurance, HDFC Life Insurance and ICICI Prudential.
The real problem for LIC at present was widespread bearish market dynamics not only domestically but globally as inflationary pressures and monetary policy tightening have upset the buying mood. Insurance stocks have also followed the volatile bandwagon.
However, on Friday, the BSE Sensex closed at 54,326.39, up 1534.16 points or 2.91%. Whereas Nifty 50 closed at 16,266.15 with a gain of 456.75 points or 2.89%.
Unlike its peers, LIC failed to take advantage of the market rally.
SBI Life Insurance shares closed 1069.25 up 1.2% on BSE today, while ICICI Prudential closed at Rs. 511.60 each ended at 2.64% and HDFC Life Insurance 544.65 each, an increase of 2.95%.
LIC is still a good investment especially for the long term.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The poor performance post listing is partly due to unfavorable market conditions. Also, insurance companies, in general, have been underperforming during the last one year. Investors should take it as a long term investment and wait patiently.”
LIC launched its initial public offering of approx. 21,000 crore from May 4 to May 9. LIC’s price band was from 902 949 per equity share. Exemption under IPO 45 per equity share offered and discounted to retail and eligible employee categories 60 per equity share to the policyholders.
The IPO was fully subscribed 2.95 times with huge demand from policyholders, employees, institutional and HNIs.