Shares of Life Insurance Corporation of India (LIC) fell more than 2 per cent to Rs 855.80 on Thursday, taking the total fall to 9.8 per cent in the three days since the listing. The LIC stock was listed at Rs 867 on the BSE on Tuesday, with an IPO price of Rs 949 per share. The Rs 21,000 crore public issue received almost three times the subscription in the six-day subscription window earlier this month, as opposed to the normal three-day window. On the day of listing of LIC IPO shares, Macquarie started coverage of the stock with a neutral rating and set a target of Rs 1,000.
Analysts say that EV (embedded value) is highly sensitive to equity market movements. “A 10% fall in the equity market could depreciate EVs by 7% for LIC, far more than peers in the private sector, where the impact is about 1-2%,” they say. They explained that if an investor takes exposure to LIC stock, it is indirectly exposing the equity market and the underlying volatility that comes with it.
In terms of traded volume, a total of 2.33 lakh shares were traded on the BSE, with 36.54 lakh shares traded on the National Stock Exchange (NSE) so far this day. “Those who are stuck with the allotted shares must hold on to their investment, let the price stabilize instead of rushing out,” said Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Jamesstone Equity Research and Advisory Services, Financial. com Vaishnavism advised investors to wait on the shore and think of entering the stock. “It would be wise to take some time to discover the natural value before entering the stock,” he added.
The LIC stock has seen a weak response since listing, with the stock currently trading at a fresh 52-week low. “Concerns about global inflation and investor sentiment on global economic growth seem to have had a negative impact on LIC in the short term,” Amar Deo Singh, chief adviser at Angel One, told FinancialExpress.com. Given LIC’s leadership position in the insurance business and the future prospects of the business in the coming years, Singh advised investors to hold on to the stock as a long-term investment.
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