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The largest insurer LIC struggled to keep a steady pace since its market debut. Although on Friday, broadly markets turned bullish, this was not the case with Life Insurance Corporation of India (LIC). The downside in LIC did not seem to tire down as investors booked heavy profits pushing the shares to even at their new all-time lows.

In the last four trading sessions, LIC not only lost its fifth most valued company position but also, its market cap has been wiped out to the tune of more than 77,600 crore against the IPO issue price.

On Friday, LIC shares closed at 826.25 apiece down by 14.50 or 1.72% on BSE. The shares were near their new 52-week low of 825.05 apiece that was clocked earlier today.

At the closing price of Friday, LIC's market cap stood at 5,22,602.94 crore. This is lower by 77,639.06 crore against IPO's issue price market cap.

At the upper price band of 949 apiece in the IPO, LIC's market cap stood at 6,00,242 crore.

LIC is listed on stock exchanges in the large-cap category. On BSE, LIC is available for trading in the list of ''A'' Group Securities.

On BSE, LIC listed at a nearly 9% discount to 867 on May 17 against its IPO upper price band of 949 per equity share.

On the debut day, despite opening at a discount LIC clocked its lifetime high of 920 on Dalal Street, however, since then the shares have only been on a downturn. The second day did see a flattish response from investors, but the third day saw massive selling pressure in LIC shares making them dive by more than 4%. Although, on the fourth day, LIC recovered some of its previous losses but slipped by nearly 2%.

Compared to its all-time high, LIC shares have dropped by more than 10% by Friday's end. In comparison to its IPO upper price band, LIC shares have nosedived by over 13% as of today.

Due to a steep selloff, LIC lost its 5th most valued company position on Thursday and FMCG giant Hindustan Unilever which earlier held the rank bagged it again.

When LIC had listed, it surpassed HUL to hold the fifth rank on BSE. But that has changed now!

As of May 20th, LIC is now the sixth-largest company in terms of market share, while HUL holds its 5th rank with a market cap of 5,46,397.45 crore.

However, LIC stays the largest insurer compared to peers SBI Life Insurance, HDFC Life Insurance, and ICICI Prudential on stock exchanges.

The real problem for LIC currently was the broader bearish market dynamic not just domestically but also globally as inflationary pressures and monetary policy tightening has unnerved the buying mood. Insurance stocks as well have followed the volatile bandwagon.

However, on Friday, BSE Sensex finished at 54,326.39 up 1534.16 points or 2.91%. While the Nifty 50 closed at 16,266.15 higher by 456.75 points or 2.89%.

Unlike its peers, LIC failed to reap the benefits of a bullish market tone.

SBI Life Insurance shares closed at 1069.25 apiece up by 1.2% on BSE today, while ICICI Prudential settled at 511.60 apiece up by 2.64% and HDFC Life Insurance ended at 544.65 apiece advancing by 2.95%.

LIC is still a decent investment especially for long term. 

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "The poor post-listing performance is partly due to the adverse market condition. Also, insurance companies, in general, have been performing poorly during the last one year. Investors should treat this as a long-term investment and wait patiently."

LIC launched its initial public offering worth nearly 21,000 crore from May 4 to May 9. LIC had a price band of 902 to 949 per equity share. Under the IPO, a discount of 45 per equity share was offered to retail and eligible employee categories and a discount of 60 per equity share to policyholders.

The IPO was fully subscribed by 2.95 times with massive demand from policyholders, employees, institutional, and HNIs.

 

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