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Life Insurance Corporation of India (LIC), the largest life Insurance provider in India got its shares listed on the Indian stock exchanges (BSE & NSE) on 17th of May 2022.

The offloading of shares via IPO was planned by the central government and the IPO was one of the largest IPOs in the Indian stock markets history. The insurer’s IPO was also much hyped and all investors were optimistic to benefit from the listing of the company. There has been many investors who applied for the IPO looking at the huge reputation of the company. LIC IPO collected as much as Rs. 18,300/- crore from the market.

However, in a surprise the IPO disappointed on the day of listing by opening below the issue price and since then continues to move downward.

Today LIC’s shares fell more than 3% on both the stock exchanges and have seen all time low of Rs. 753 since listing of the IPO.

The issue price of LIC IPO was of Rs. 949. On the day of IPO listening, LIC’s shares listed/opened at a discount of nearly 9% at Rs.867.20 on BSE & at Rs. 872 on NSE respectively.

The present price of Rs. 753 is a decline of over 20% from the issue price.

In this period from listing till today, investors have lost market capital of over Rs. 1.23 lakh crore.

While those who didn’t apply for this IPO are felling lucky, the investors who got allotment of shares are worried on their losses.

Many other are also thinking to make an entry as it has already corrected drastically over 20%.

The recent results of LIC was not very promising as compared to the expectation. The company could not manage substantial growth in new insurance premium and renewal/ persistency.
To add to this the stock markets continue to remain volatile due to the geopolitical tension between Russia and Ukraine.

While present position of the stock looks much attractive from the price point and the fact that it is already corrected much but future downturn can not be ruled out.

Volatility and uncertainty in the market indicates a lot of risk and investors must consider that before taking any call. Investors may take small positions to hedge the volatility risk and benefit from averaging.

However, from the size of business and coverage LIC still enjoys it’s dominancy in the Indian life insurance space.

Note: Investments into equity are subject to market risk, please read all the risk conditions before investing.