LIC Shares Lists at Discount; Valuation falls

After Paytm, the most hyped IPO of the mega insurer of the country Life insurance corporation of Indi made its debut on NSE and BSE on 17th May 2022

A tepid listing was on the card as indicated by the grey market, which showed a fall in premium with days approaching for the IPO to list. The IPO was oversubscribed and the government of India raised $2.7 billion by selling its stake in LIC as a part of the disinvestment process.

The life insurance corporation IPO was listed at a discount of almost 8% from its allotment price of Rs949. However, the discount reduces the breakeven point for employees and policyholders who got shares at Rs904 and Rs889, respectively.

VALUATION LOST

At the issue price of Rs 949, the LIC valuation stood at ₹ 6,00,242 crore. At the listing price, resulting in a loss of around ₹ 42,500 crores, the valuation of LIC stands at ₹ 5,57,675 crore.

PRICE MOVEMENT DURING THE TRADING SESSION

During the trading session, LIC IPO touched the high of ₹918.95, much below the allotment price of Rs949. The disappointment got grave as it slipped from the mark of ₹900 to touch the low of ₹860, to finally close the day at ₹875.25.

INVESTOR’S CALL

LIC did disappoint its investors on its debut day eroding almost Rs42,500 crores of its investors. However, the firm still holds its strong fundamental and financial basis. With the increasing size of the industry and growing demand for insurance with an increase in financial inclusion and financial literacy, LIC will certainly prove to be a value and growth-based stock in the long term.

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