LIC shares fell 1.62% to Rs 710 each on Friday morning. /Representative image |
Shares of Life Insurance Corporation hit a new low on Friday at the end of the regulatory lock-in period for shares awarded.
LIC shares fell 1.62% to Rs 710 each on Friday morning.
This is the ninth consecutive session of decline in the insurer’s share price.
The certificate has lost 15% so far. The shares fell 34% below their issue price.
LIC’s market capitalization fell to Rs 4.52 lakh crore from Rs 6 lakh crore at the upper end of the price range of Rs 949 each at the time of listing.
Santosh Meena, Head of Research at Swastika Investmart Ltd. on LIC, said: “We believe India’s highly underserved life insurance market is still in its infancy and is well placed to capitalize on the huge growth potential. LIC has several competitive advantages, including a strong brand equity, a massive agent network and an enviable distribution network. In addition, the company intends to address the company’s concerns such as low VNB margins, loss of market share , heavy reliance on agency channel etc. the show was priced against intrinsic value of 1.1x, which was already discounted to its global and Indian peers , and the current drop provides additional valuation comfort.
“Another point we would like to emphasize is that investors should be aware that insurance is a long-term business; therefore, the development and accumulation of wealth only occurs over time. An interesting observation that can be seen is that the bottom reached on the first day of trading after the 30-day lock-in period of the lead investor may provide strong support for another rally in quality stocks. a good time to buy on such dips,” Meena added.
LIC shares wiped out almost a quarter of their wealth from the issue price of Rs 949.
Earlier on May 17, the country’s largest insurer, LIC, made a lackluster stock market debut, listing at a discount of more than 8% after a successful initial public offering (IPO).
LIC had priced its shares at Rs 949 each after a successful IPO, which was nearly 3x oversubscribed when it closed on May 9.
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