LIC Share Price Plummets by 40% One Year After IPO
- ByStartupStory | May 18, 2023
In the first year of trading, shares of LIC, the country’s largest insurer, have witnessed a significant decline of nearly 40% from its issue price. This decline has resulted in investors’ wealth eroding by Rs 1.93 lakh crore. Following a successful Initial Public Offering (IPO) that generated Rs 20,557 crore for the exchequer, LIC’s shares listed at a discount of over 8% on May 17 last year. The shares debuted at Rs 872 on the BSE and Rs 867.20 on the NSE.
LIC’s stock has experienced a significant decline, down by 39.92% from the issue price of Rs 949 on the BSE. Similarly, on the NSE, the stock has tumbled 39.93% from its issue price. However, on Wednesday, LIC shares managed to make a slight recovery, closing with a gain of 0.48% at Rs 570.10 on the BSE. On the NSE, the shares ended at Rs 570, reflecting a 0.44% increase.
During its first year of trading, the company’s shares achieved a 52-week high of Rs 920 and a 52-week low of Rs 530.20. However, it has been unable to surpass its issue price of Rs 949 over the past year. In comparison, the 30-share BSE Sensex experienced a significant increase of 7,242.17 points or 13.33% during the same period, while the broader NSE Nifty rallied 1,922.45 points or 11.82%.
During its listing day, LIC secured a place among the top-five most valued companies, with a market capitalization of nearly Rs 5.54 lakh crore. However, as of the close of trading on Wednesday, the company’s market capitalization declined to Rs 3,60,588.12 crore. This represents a decrease of Rs 1,93,411.88 crore from its initial valuation on the listing day. Currently, LIC holds the 13th position in the overall ranking of top domestic companies based on market valuation.
After a highly successful initial public offering, LIC has established the issue price of its shares at Rs 949 each. The IPO, which closed on May 9, 2022, was oversubscribed by nearly three times.
“There are several reasons why LIC could not live up to expectations, even as analysts remained upbeat about its IPO”, Girish Sodani, Head of Equity Market at Swastika Investmart Ltd, said. “One of the reasons the IPO failed to get a good listing was the dampening market environment in 2022. Though LIC’s business fundamentals remain strong, the stock has been in a free fall ever since its listing”, he added.
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