In four trading sessions, LIC lost 77,600 crores in market capitalization from the IPO issue price.
Since its first public offering, the largest insurer, LIC, has struggled to maintain a consistent pace. Even though most markets went bullish on Friday, the Life Insurance Corporation of India did not (LIC). The LIC’s downward trend did not appear to be tiring as investors booked large profits, bringing the stock to fresh all-time lows.
In the last four trading sessions, LIC has lost not only its position as the fifth most valuable firm but also its market cap, which has been wiped out by more than 77,600 crores compared to the IPO issue price.
On the BSE, LIC shares closed at 826.25 per share on Friday, down 14.50 percent, or 1.72 percent. The stock was trading near its new 52-week low of $825.05 per share, which was set earlier today.
The market capitalization of LIC was 5,22,602.94 crores at Friday’s close. This is less than the IPO’s issue price market cap of 77,639.06 crores.
LIC’s market valuation was 6,00,242 crores at the IPO’s upper price band of 949 per share.
LIC is a large-cap company that trades on stock exchanges. On the BSE, LIC is listed among the “A” Group Securities for trading.
On May 17, LIC debuted on the BSE at a nearly 9% discount to its IPO upper price band of 949 per equity share, for $867.
LIC hit a lifetime high of 920 on Dalal Street on its launch day, despite debuting at a discount, but the shares have only gone downhill since then. Investors were flat on the second day, but tremendous selling pressure on LIC shares on the third day caused them to plummet by more than 4%. Although LIC regained some of its prior losses on the fourth day, it still fell by over 2%.
By the end of Friday, LIC shares had plunged more than 10% from their all-time high. LIC shares have plummeted by nearly 13 percent today despite their IPO upper price range.
On Thursday, LIC lost its 5th most valuable business position due to a strong selloff, and FMCG behemoth Hindustan Unilever, which previously held the position, reclaimed it.
When LIC became public, it overcame HUL to take fifth place on the BSE. But that is no longer the case LIC is currently the sixth-largest firm in terms of market share, while HUL is ranked fifth with a market valuation of 5,463,454 crores as of May 20th.
On the stock markets, however, LIC remains the largest insurer when compared to its peers, SBI Life Insurance, HDFC Life Insurance, andICICI Prudential.
The fundamental issue for LIC right now is the larger negative market dynamic, which has unsettled the purchasing attitude not only in the United States but throughout the world as inflationary pressures and monetary policy tightening have unnerved the buying mood. Insurance stocks have also jumped on the volatility bandwagon.
The BSE Sensex, on the other hand, it concluded the day at 54,326.39, up 1534.16 points or 2.91 percent. The Nifty 50 ended the day at 16,266.15, up 456.75 points or 2.89 percent. LIC, unlike its peers, did not profit from a positive market tone.
On the BSE today, SBI Life Insurance shares closed at 1069.25 per share, up 1.2 percent; ICICI Prudential was at 511.60 per share, up 2.64 percent; and HDFC Life Insurance was at 544.65 per share, up 2.95 percent. LIC is still a good long-term investment.
Geojit Financial Services’ Chief Investment Strategist, Dr. VK Vijayakumar, stated, “Part of the reason for the poor post-listing performance is the current market situation.” In addition, insurance businesses have performed poorly in general in recent years. Investors should wait patiently and see this as a long-term investment.
From May 4 to May 9, LIC had an initial public offering (IPO) valued at about 21,000 crore. The price range for LIC was 902 to 949 per equity share. Retail and qualifying employee groups received a discount of 45 per equity share, while policyholders received a discount of 60 per equity share.
The IPO was oversubscribed by 2.95 times due to strong demand from policyholders, workers, institutions, and high-net-worth individuals.
edited and proofread by nikita sharma