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LIC shares rebound, but well below the level of the listing price

LIC is currently trading at Rs 705, against its listing price of Rs 867.

New Delhi:

Insurance heavyweight Life Insurance Corporation of India (LIC) did not make headlines in a widely expected way ahead of its highly anticipated mega-listing on Indian stock exchanges.

Since its IPO on May 17, with a discount of more than 8% on its issue price, the insurance company’s share price has been falling and its path has been difficult, barring a recovery. in recent sessions. .

It is currently trading at Rs 705, against its listing price of Rs 867, implying a decline of almost 19%. It is, however, 26% lower than its original issue price of Rs 949.

It recently managed to recover from its all-time low of Rs 650.

Through the IPO, the Center had shed 3.5% of its stake in the large insurance company. The IPO valued the company at Rs 6 lakh crore.

With falling stock prices, the market capitalization in terms of value has fallen to Rs 446,323 crore now, according to stock market data.

Established on September 1, 1956, the oldest and largest insurance company was introduced with the claimed aim of reaching every insurable person in the country and providing them with adequate financial coverage at a reasonable cost.

Today, LIC operates with 2,048 branches, 113 divisional offices, 8 zonal offices, 1,381 satellite offices, as well as the head office, the insurance company’s website says.

Stock market sentiment was weak even before the launch of LIC’s IPO, mainly due to the ongoing conflict in Ukraine and related headwinds.

The Russian invasion of Ukraine as well as the massive exodus of foreign portfolio investors from India have certainly plagued domestic equity markets. Despite these volatile circumstances, LIC’s IPO was the largest public offering in India so far.

Interest rate hikes by the central bank Reserve Bank of India amid rising inflation and the ongoing Russian-Ukrainian war could be among the main reasons for the decline in LIC stock prices. Many analysts believe that the decline could also be in line with the ongoing correction of benchmarks – Sensex and Nifty, which essentially means that the underperforming stock market debut could simply reflect current global markets, instead of underlying fundamentals. assets of the company.

India’s stock market has been in a perfect storm over the past few weeks as monetary policy tightening triggered by rising inflation, high crude oil prices, rupee depreciation, investor outflows foreigners, as well as the widening of the current account deficit.

So far in 2022, they have sold shares worth Rs 221,910 crore, according to NSDL data. Over the same period, Sensex and Nifty were down almost 10% each.


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