LIC is now India’s fifth most valuable company, checklist

Image source: PTI

Logo of Life Insurance Corporation (LIC) at the Bombay Stock Exchange in Mumbai.

Strong points

  • LIC stock listed over 8% off on NSE and BSE on May 17
  • The government generated around Rs 21,000 crore from the supply
  • LIC’s IPO was the largest initial public offering ever in the country

Life Insurance Corporation (LIC), the country’s largest insurer, made a lackluster IPO on Tuesday. The listing price was lower than the price at which shares were allotted to policyholders, employees and retail investors of LIC.

Its share was listed at over 8% discount on the NSE and BSE from the issue price of Rs 949. LIC’s share was listed at Rs 867.20 on the NSE, showing a discount of Rs 77 each. On the BSE, the certificate was listed at Rs 872, a reduction of Rs 81.80 each.

LIC shares reached a high of Rs 920 on BSE and closed at Rs 875.45. On the NSE, it peaked at Rs 918.95 and closed at Rs 875.25 each.

With this listing, state-owned LIC entered the list of the five most valuable companies in the country with a market capitalization of Rs 5.54 lakh crore, according to BSE data from May 17.

The four companies with market capitalization above LIC are Reliance Industries owned by Mukesh Ambani, Tata Consultancy Services owned by Tata Group, banking and financial services provider HDFC Bank and IT services provider Infosys.

India Tv - Most Valuable Indian Companies

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India’s Most Valuable Companies

What is market capitalization

Market capitalization is the total valuation of a company based on its stock price.

The government has sold over 22.13 crores of shares or a 3.5% stake in LIC through the IPO. It grossed Rs 20,557 crore. LIC’s IPO was also India’s largest to date. Paytm’s IPO in 2021 had raised Rs 18,300 crore, surpassing state-owned Coal India’s record of nearly Rs 15,500 crore in 2010. Anil Ambani’s Reliance Power had in 2008 raised Rs 11,700 crore through public offering.

Ravi Singh, VP and Head of Research, ShareIndia, suggested investors should hold and the scrip will see a long-term upside. He said new investors can take advantage of declines to accumulate that share for the long term.

“LIC’s share price may experience further declines around 860 levels in the coming days. Given the positive outlook for the insurance sector and the fact that LIC is the market leader in this sector, investors long-term should continue to hold the scrip while short-term investors can wait to enter at a lower price,” he said.

LIC was formed by the merger and nationalization of 245 private life insurance companies on September 1, 1956, 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 benefits. The insurer’s group product portfolio includes 11 group products.

READ MORE: LIC debuts at an 8% discount

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