The share price of LIC, the country’s largest insurer, has fallen nearly 40% from its issue price in its first year of trading, eroding investor wealth to Rs 1.93 billion.
LIC was listed at a discount of more than 8% on May 17 last year after a successful Initial Public Offering (IPO) which fetched Rs 20.557 billion to the Ministry of Finance. LIC shares were listed at Rs.872 on BSE and Rs.867.20 on NSE.
LIC’s share price is down 39.92% against BSE’s issue price of Rs 949. NSE fell 39.93% from the issue price.
On Wednesday, LIC shares rose 0.48% on BSE to close at Rs 570.10. On the NSE, the company’s shares closed at 570 rupees, up 0.44%.
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In its first year of trading, the company’s share price hit a 52-week high of Rs 920 and a 52-week low of Rs 530.20. It failed to exceed the issue price of Rs 949 for the past year.
By comparison, the 30-share BSE Sensex jumped 7,242.17 points or 13.33% over the period covered, while the broader NSE Nifty rose 1,922.45 points or 11.82%.
On the day of listing, LIC was among the top five most valuable companies with a market capitalization of approximately Rs 5.54 billion.
At the close of trading on Wednesday, the company had a market capitalization of Rs 36588.12 crore. This is a depreciation of Rs 1,934,188 crore from the valuation dated on the listing date.
The company is currently ranked 13th overall in terms of market capitalization among the top domestic companies.
After the successful initial public offering, LIC had fixed the issue price of its shares at Rs 949 per share, but the offer was nearly tripled at the close of trading on May 9, 2022.
Girish Sodani, Head of Equity Markets at Swastika Investmart, said: “Despite analysts’ optimism about an IPO, LIC has failed to live up to expectations for several reasons. One of the reasons why it did not go public well was the following.” He added that LIC’s business fundamentals remain strong, but the stock has fallen since its listing.
Despite a year-long slump, some analysts are still confident the stock will recover.