LIC's weak listing shocks investors, experts hope for recovery

'LIC's weak listing shocks investors, experts hope for recovery'

Weak listing of shares of Life Insurance Corporation of India (LIC) disappointed investors today. Ever since the fall in the price of LIC shares in the gray market, there were apprehensions that LIC shares may get listed below the issue price. However, market experts say that in the negative environment created in the stock market, LIC's shares have listed much better and this stock will also recover easily as soon as the market improves.

This share of Rs 949 was listed on the Bombay Stock Exchange today, down about 8 percent at Rs 867, while its listing on the National Stock Exchange was at Rs 872. During the trading so far, LIC's stock had once achieved a strength of Rs 918.95. At present, after trading for the first two hours, at 11.15 pm, the stock was trading at Rs 888 with a weakness of Rs 61, or a fall of 6.36 percent.



Due to weak listing of LIC shares, policyholders, employees and retail investors of LIC could not get a chance to make profits on the very first day despite getting discounts. However, shortly after the weak listing, the stock of LIC improved its position on both BSE and NSE and reached the level of Rs 900. But even this share price was not going to benefit the retail investor.



Let us tell you that for this share of Rs 949, LIC had given a discount of Rs 60 per share to its policy holders, while it gave a discount of Rs 45 per share to its employees and retail investors. In this way, after the discount on the shares, LIC had allotted shares to the policy holders at the rate of Rs 889, while the shares were given to its employees and retail investors at the rate of Rs 904. But investors had to face a lot of disappointment due to the listing of this stock with a weakness of about 8 percent.



LIC's IPO was the biggest IPO in the country so far and people were waiting for this IPO for a long time. After the launch of the IPO, there was a lot of demand for the shares of LIC in the gray market also in the initial phase. This share was traded at a premium of Rs 95 in the gray market. However, in the last 1 week, the premium of LIC shares kept falling in the gray market. In the last 2 days, the shares of LIC started trading at a discount instead of a premium. After this fall in the premium of the stock in the gray market, a sense of despair had started building among the investors and there were fears that there could be a weak listing of this stock on BSE and NSE.



Despite the weak listing of LIC shares, market experts say that in the current situation, the level at which LIC shares have been listed should also be considered a big success. Prashant Dhami, Vice President, Dhami Securities, says that there is a continuous downward trend in the markets across the world. In such a situation, there was a possibility of a decline of 12 to 15 percent in the listing of LIC shares.



Despite downside apprehensions, the stock has indicated a consolidation of its basic fundamentals by listing at Rs 867 and Rs 872 levels on BSE and NSE respectively with a fall of nearly 8 per cent. Especially shortly after the listing, LIC's shares jumped to the level of Rs 918.95. The strength of this stock can also be realized from this. However, after this high level, the shares of LIC once again fell and these shares again fell below the price of Rs 900 per share.



According to Prashant Dhami, LIC's stock has received tremendous support from policyholders, employees and retail investors during the IPO. LIC is the strongest brand in the country in the field of life insurance. Also, this insurance company is recognized in most parts of the country. The biggest thing is that LIC has a huge sales network all over the country and there is no other insurance company in a position to compete with LIC in the life insurance sector today. Hence the fundamentals of this stock remain strong.



On the other hand Indian stock market has been working in weakness for a long time. Especially during the last 1 month the market has fallen a lot. In such a situation, it is not easy for any new IPO to list strongly and do business with growth. But whenever the market turns strong, even stocks with strong fundamentals naturally rise. Therefore, whenever the domestic stock market rises, it will also strengthen the shares of LIC and investors will also get profits.