Shares of Life Insurance Corporation (LIC) have fallen 35% from the listing day and nearly 40% from the IPO price of Rs 949. The £24 billion loss in market cap since its listing on May 17, 2022 brackets LIC’s listing among the worst first-year performances by a public sector stock.
Considering that LIC was the biggest in terms of assets under control for years, it was assumed to be the most valuable financial organisation in India. The company was one of the most recognisable names in the financial industry and had more policyholders than there were people in Brazil.
The government had valued LIC at less than many private sector enterprises, according to its upper band pricing, when it was revealed exactly one year ago during its initial public offering (IPO). A year after listing, the corporation’s mcap has dipped to £36 billion - less than that of private sector companies like Bajaj Finance and Kotak Mahindra Bank, and 13th in terms of the most valuable companies in the country.
“LIC is more sensitive to equity movements as compared to listed peers. A 10% decline in its equity portfolio will lead to a 6. 5% fall in embedded value (and a 2. 7% fall in the value of the new business) as compared to a dip of 1. 5-2% (0. 2-0. 6%) for major listed peers,” said BoB Caps in a research report.