Life Insurance Corporation of India (LIC) IPO was the largest ever public issue in India with an issue size of Rs 21,000 crore. The IPO was oversubscribed nearly three times the issue size.
With LIC being the largest insurance company of the country, investors had high hopes from the much-hyped IPO. However, LIC stock’s downfall started with its debut.
LIC stock listed with an 8% discount at Rs 865 on May 17, 2022. One year has passed since the disappointing listing, but LIC share price is still down 34% from the listing price and 40% from the upper band of the IPO.
In terms of technicals, the relative strength index (RSI) of LIC stands at 69.9, signalling the stock is neither overbought nor oversold.
LIC stock is trading higher than the 5-day, 10-day, 20-day, 30-day and 50-day moving averages but lower than 100-day, 150-day and 200-day moving averages.
"We had BUY recommendation during the IPO Subscription and after that, we have a standalone recommendation to Buy with a long term time horizon and we believe there is a huge market as far as 'Insuring the Uninsured' is concerned. This will not only create opportunities for LIC but also for the other related entities like HDFC Life, ICICI Prudential and SBI Life," said Gaurang Shah, Senior Vice President at Geojit Financial Services.
According to Gaurang Shah, there might be a slight deceleration in growth due to the concerns outlined in the Union Budget by the Finance Minister. However, considering the long-term perspective, LIC remains a sound investment.
According to Dipan Mehta, Director at Elixir Equities, LIC is underperforming but investors should not write off this stock just yet as it is a solid player. Mehta said that at some point of time, once LIC starts getting some of the more profitable products going and scaling up, investors may see exceptional numbers coming through from LIC.
Kotak Institutional Equities has a 'Buy' call on LIC stock, pegging the life insurer's stock at Rs 975 over the next 12 months. JM Financial also has a buy call on the stock with a target price of Rs 940.
Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Business Today. Investors should consult their financial advisors before taking any position.