LIC Investors Lose Rs 1.3 Lakh Crore As Share Price Hit Record Low; Share Price Down By 23% Since IPO

The recently-listed stock of the country’s largest insurer Life Insurance Corporation has not been performing too well since its debut on the Indian exchanges on May 17, 2022, mainly because of the prevailing volatile market conditions, with a bleak economic recovery in emerging markets like India, and higher inflationary pressures, weighed on by the prolonged Russia-Ukraine crisis, also leading to supply side disruptions, among others.

LIC Loses Nearly Rs 1.3 lakh Crore Since Listing

On June 8, the insurer’s shares were in a bloodbath, and tanked to its all-time low at Rs 736.1/share, 29% lower than its IPO issue price of Rs 949/share, that too in a space of not even a month.

Also, LIC’s investors in the period have lost almost Rs 1.3 lakh crore of their wealth, led by its share decline, leading to a loss in its market capitalization. On Monday, the insurance giant’s market valuation had tripped under the mark of Rs 5 lakh crore. 

Even after declining so much in such a short time, LIC continues to retain its position under the top 10 most valued companies in India, in terms of market capitalization. At the time of writing this article, LIC held the 7th position in this list of top-10 companies, ahead of the banking behemoth SBI, mortgage lender HDFC and the telecom giant Bharti Airtel.

According to data, LIC’s first-year premium in April 2022 rallied a whopping 141.2%, more than a 50.6% jump in March 2022 and a 35.4% surge in February 2022.

According to the stock market expert Sunil Damania, “When LIC recently came out with its IPO, we had advised investors to avoid investing in it. This is because, at that point in time, we believed that the company’s valuation and the one that it was asking for was a little rich.

Besides, the market would always be cautious that the Govt of India would keep diluting its stake in LIC IPO now and then to meet SEBI guidelines. However, looking at the current market situation and how the stock has corrected post-IPO, we believe that LIC, even at this level, may continue to underperform going forward.”