Shares of the country’s largest insurer LIC have tumbled nearly 40% from its issue price in the first year of trade, with investors’ wealth eroding by Rs 1.93 lakh crore.
LIC had listed at over 8% discount on May 17 last year after a successful Initial Public Offering (IPO) which fetched Rs 20,557 crore to the exchequer. Shares of LIC had listed at Rs 872 on the BSE and at Rs 867.20 on the NSE.
The stock of LIC is down 39.92% as against the issue price of Rs 949 on the BSE. On the NSE, it has tumbled 39.93% from the issue price.
On Wednesday, LIC shares ended with a gain of 0.48% at Rs 570.10 on the BSE. On the NSE, shares of the firm ended at Rs 570, an increase of 0.44%.
In the first year of trading, shares of the company have hit a 52-week high of Rs 920 and a 52-week low of Rs 530.20. It has failed to surpass the issue price of Rs 949 during the past year.
In comparison, the 30-share BSE Sensex has jumped 7,242.17 points or 13.33% during the period under review while the broader NSE Nifty has rallied 1,922.45 points or 11.82%.
On its listing day, LIC got into the list of top-five most valued companies with a market capitalisation of nearly Rs 5.54 lakh crore.
At the close of trading on Wednesday, the company commanded a market capitalisation of Rs 3,60,588.12 crore. This is down by Rs 1,93,411.88 crore from the valuation it commanded on the listing day.
The company now stands at the 13th position in the overall ranking of top domestic companies by market valuation.
LIC had fixed the issue price of its shares at Rs 949 apiece after a successful initial public offering, which was oversubscribed nearly 3 times when it closed on May 9, 2022.
“There are several reasons why LIC could not live up to expectations, even as analysts remained upbeat about its IPO, Girish Sodani, Head of Equity Market at Swastika Investmart Ltd, said. One of the reasons the IPO failed to get a good listing was the dampening market environment in 2022. Though LIC’s business fundamentals remain strong, the stock has been in a free fall ever since its listing, he added.
Despite the year-long setback, several analysts remain confident that the stock will bounce back.
