Life Insurance Corporation (LIC) logo at the Bombay Stock Exchange in Mumbai.
Highlight
- LIC’s stock listed on May 17 at a discount of more than 8 percent on NSE and BSE
- The government has raised around Rs 21,000 crore from this offer.
- LIC’s IPO was the largest ever initial public offering in the country
The country’s largest insurance company Life Insurance Corporation (LIC) made a stellar start on the stock exchanges on Tuesday. The listing price was lower than the price at which the shares were allotted to the policyholders, employees and retail investors of LIC.
Its shares got listed at a discount of over 8 per cent on NSE and BSE against the issue price of Rs 949. LIC share got listed on NSE at Rs 867.20, showing a discount of Rs 77. On BSE, the stock was listed at Rs 872 with a discount of Rs 81.80.
LIC shares hit a high of Rs 920 on BSE and closed at Rs 875.45. It touched a high of Rs 918.95 on NSE and closed at Rs 875.25.
With the listing, state-owned LIC made it to the list of top five most valuable companies in the country with a market capitalization of Rs 5.54 lakh crore, as per BSE data on May 17.
The four companies with a market capitalization higher than LIC are Mukesh Ambani-owned Reliance Industries, Tata Group-owned Tata Consultancy Services, banking and financial services provider HDFC Bank and IT services provider Infosys.
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The government sold 22.13 crore shares or 3.5 per cent stake in LIC through IPO. It earned Rs 20,557 crore. LIC IPO was also India’s biggest IPO till date. Paytm IPO raised Rs 18,300 crore in 2021, surpassing state-owned Coal India’s record of around Rs 15,500 crore in 2010. Anil Ambani’s Reliance Power raised Rs 11,700 crore through a public offering in 2008.
Ravi Singh, Vice President and Research Head, ShareIndia suggests that investors should hold and the stock will rally in the long run. He added that new investors can take advantage of the downside to hold this stock for a longer period.
“LIC share price may drop some more around 860 level in the coming days. Considering the positive outlook of the insurance sector and LIC being the market leader in this segment, long term investors should continue to hold the stock during the short term. Investors can wait to enter at a lower price.”
LIC was formed on 1st September 1956 by merging and nationalizing 245 private life insurance companies with an initial capital of Rs 5 crore. Its product portfolio includes 32 individual plans (16 participating and 16 non-participating) and seven individual optional rider benefits. The group product portfolio of the insurer comprises 11 products of the group.
Read more: LIC made a weak debut in the stock market, listed at 8% discount