Shareholders of Life Insurance Corporation (LIC) have lost Rs 94,116 crore in the last 14 trading sessions due to weak investor sentiment in a highly volatile market. The market capitalisation of the public sector insurer fell to Rs 5,06, 126 crore today against a market cap of Rs 6,00,242 crore, going by the upper price band of India's largest initial public offer (IPO).
With today's fall, the firm has slipped to the sixth position in terms of top companies by market cap on the Indian bourses. On the listing day, LIC stood at fifth position but lost one slot as ICICI Bank's market cap (Rs 5.21 lakh crore) exceeded that of the insurer on BSE.
LIC stock hit its all-time low of Rs 800.05 today as investor sentiment remained weak around the stock of India's largest insurer.
The stock has fallen 7.72 per cent or Rs 67 from its listing price within two weeks of its market debut.
The share made a tepid debut on May 17, listing at a discount of 8.62 per cent against the IPO issue price. The company offered its shares in a price band of Rs 902- Rs 949. The stock is listed at Rs 867.20 on BSE.
On NSE, the stock is listed at Rs 872, 8.11 per cent lower to the IPO price.
Also read: Cannot compare latest quarterly profit with earlier ones: LIC
Meanwhile, Emkay Global has initiated coverage on LIC with a 'hold' rating. It has fixed a target price of Rs 875. Going by Emkay Global's estimates, the stock may not be able to generate a profit for its IPO investors for quite some time.
The target price is nearly 9 percent higher than the market price of the stock. The brokerage also termed the stock as "the elephant that can't dance."
Instead of LIC, the brokerage is in favour of investing in the company's private peers.
"While we appreciate LIC's market-leading position and comfortable valuations, we prefer private sector peers that have better growth, profitability and therefore higher return on Embedded Value (RoEV) prospects," wrote Avinash Singh and Mahek Shah of Emkay Global.
LIC's value of new business (VNB) accretion at around 1-1.5 per cent of enterprise value (EV) from FY25 fares poorly with around 8-11 per cent of EV being accrued as value of new business (VoNB) for private sector peers, Emkay said.
LIC's EV is largely an outcome of par and non-par fund bifurcation exercise undertaken in H1FY22, the brokerage added.
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