Shares of Life Insurance Corporation of India (LIC) made a sluggish listing on the Indian stock markets today at a discount. 867 each is down around 8.60 per cent from its upper price band on BSE 949 per equity share.
However, the listing discount for retail, policyholders and employee category allottees is not as big as it is for anchor and other category of investors, as announced by LIC. 60 per equity share discount to LIC policyholders while Rs 45 per share discount for LIC employees and retail category investors.
What do analysts recommend LIC Shares‘Weak listing’
According to stock market experts, allottees who applied for listing gains can hold the stock near the stop loss. 800 while new investors can buy LIC shares in a calibrated manner by maintaining the stop loss 735 per share level.
“LIC shares have opened at a discounted price only on account of negative secondary market sentiments. Allottees with a long-term outlook can take this as an opportunity to accumulate every 5 per cent drop from the listing price levels, while new investors can start buying LIC shares in a calibrated manner till it rises above Go. 730 levels,” said Anuj Gupta, Vice President – Research at IIFL Securities.
“Those who applied for listing gain can maintain a stop loss of Rs. 800. New investors can take advantage of dips to hold this stock for long term. Another thing to note is that, LIC did not pay any dividend in the last financial year, so there is a high chance that the company may declare a good dividend this year, thus making it a good dividend game. ,” said Santosh Meena, head of research at Swastika Investmart Ltd.
Advising the allottees to stay invested despite the weak LIC share listing, Partha Nyati, Founder, Tradingo said, “The weak listing of the company can be attributed to high volatility in the markets and negative market sentiments. LIC has several competitive advantages. Further, the issue of the company, at a value of 1.1x the Embedded Value, offers a valuation facility, therefore, we suggest that investors stay with the company for a longer period despite negative listing.”
On why one should invest in LIC shares despite the weak listing, Anuj Gupta of IIFL Securities said, “I believe weakness in LIC shares will be limited as the big players are expected to chip in at discount levels In addition, the insurance stock is a low float post-listing.”
Advising new investors to wait for some time, Ravi Singhal, Vice Chairman, GCL Securities said, “Those who have missed out on applying for LIC IPO are advised to wait for a few sessions as it Open at a discounted price only because of weak stock. Market sentiment. Since that factor is still present, one should wait for the stock to settle down and maintain the stop loss if there is a major fall in LIC stock. 735 level. LIC Shareholders who have a long term outlook are advised to keep on depositing on major downsides while maintaining Stop Loss 735.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.