lic share price: LIC stock wipes off wealth equivalent to Tata Motors’ market cap
Even policyholders and retailers, who were given a discount of Rs 60 and Rs 45, respectively, over the IPO price are sitting at a loss of up to 20 per cent.
The state-run insurer listed at a market capitalization of Rs 6 lakh crore, which has now slipped to Rs 4.6 lakh crore level. The journey of LIC on Dalal Street has been a painful one for investors so far as the stock has wiped out more than Rs 1.4 lakh crore of wealth.
LIC’s mcap loss has been equivalent to the total valuations of bluechips stocks like
, , Mahindra & Mahindra and .
LIC made a tepid market debut last month, listing at a discount of 9 per cent over its issue price. Despite this, it became the fifth largest firm by market capitalization post its debut. Now it has slipped to the seventh spot after
If compared to peers, the wealth erosion of LIC has been significantly higher than the valuations of its closest peers including
(about Rs 1.25 lakh crore) and (1.15 lakh crore).
In a note issued a couple of days ago, Santosh Meena, Head of Research, , said India’s highly underserved life insurance market is still in its infancy and is well-positioned to capitalize on the enormous growth potential.
“LIC has a number of competitive advantages, including a strong brand value, a massive network of agents and an enviable distribution network,” he added. “Investors with a long-term view can buy this stock at the current market price and follow a buy on dip strategy.”
Brokerage firm Emkay Global recently initiated its coverage on LIC with a hold rating and target price of Rs 875 on the stock. Even if this target is achieved, policyholders would not be able to recover their losses fully.
“While we appreciate LIC’s market-leading position and comfortable valuations, we prefer private sector peers that have better growth, profitability and therefore higher RoEV prospects,” said the report.