LIC Shares Settle Lower On Its Listing Day

Shares of Life Insurance Corporation of India (LIC) were not lifted higher even as the market mood improved due to gains in the global equities. LIC shares at the close on the NSE settled at a price of Rs. 875.25 (down over 7.7%), while on the BSE it ended at Rs. 875.45, still lower by 7.75% from the IPO issue price.

Today, after garnering strong response for its public issue, the country's largest ever issue saw tepid listing. As against the IPO price of Rs. 949, the issue on the BSE listed at a price of Rs. 867, a discount of 8.64%. On the other hand, on the NSE, the counter listed at a discount of again over 8% at Rs. 872 apiece.

Meanwhile, as LIC listing has been as expected because of weak market conditions and today's gains on the indices also failed to prop up the public insurer's equity. Experts advice not to panic and instead suggest allotted investors to hold LIC scrip for the medium to long term. "Those who are planning to buy on listing day should accumulate by taking volatility as an opportunity", Prashanth Tapse, research analyst and vice president of Research at Mehta Equities is quoted as saying in a leading dailies.

"The valuation at Price to Embedded Value of 1.1 had discounted the above concerns but nevertheless, investors must be aware that the business of insurance is long-term in nature and therefore we recommend investors to stay with the company for the long term even if the company lists at a discount," says Agrawal-senior analyst at Swastika Investmart Ltd.