LIC shares hit new low, one-fourth of mcap wiped out
Premium- LIC share price has been witnessing selling pressure since its listing last month
Shares of Life Insurance Corporation of India (LIC) continued to decline with the stock hitting a new record low of ₹723 apiece on the BSE in Thursday's afternoon deals. The stock is now about 25% down from its IPO issue price of ₹949.
There has been consistent erosion in the market value of the country's largest insurer. In less than one month of its listing, almost one-fourth of LIC's market value has been wiped out. At the issue price of ₹949 the market capitalisation of LIC stood at ₹6,00,242 crore, and has now fallen to ₹4,58,024 crore on the BSE.
LIC share price has fallen sharply since its listing on the stock exchange on May 17, 2022. LIC shares were allotted to the investors at ₹949 apiece. It got listed at the stock exchanges at discount.
In its first earnings release post shares listing, LIC posted a 17% decline in consolidated net profit to ₹2,409 crore for the fourth quarter ending March 2022 from ₹2,917 crore in the same quarter a year ago.
The total income of the insurer increased to ₹2,12,230 crore, from ₹1,90,098 crore in the same period of the previous fiscal year. LIC's net premium income rose to ₹1.44 trillion from ₹1.22 trillion year-on-year (YoY).
Its solvency ratio, a measure of an insurer's ability to meet its long-term debt obligations, rose to 1.85 from 1.76 a year earlier. The insurance giant said its asset base grew 12% to ₹41.8 trillion in FY22 from ₹37.4 trillion in FY21.
The government-run LIC is by far the largest insurer in India. The market share of the company in individual policies was 74.6% for the financial year ended March 31, 2022. In the Group business the market share of LIC during year ended March 31, 2022 was 89% by number of policies/schemes and 76% by first-year premium.
LIC IPO was open for subscription from May 4 to May 9. The government raised ₹20,557 crore by diluting its 3.5% stake in the LIC through the initial share sale, the country's biggest ever.