LIC Shares Down 30% From Issue Price, Supriya Sule Seeks FM Nirmala Sitharaman's Guidance

Nationalist Congress Party (NCP) MP Supriya Sule on Monday highlighted the current market situation of Life Insurance Corporation of India (LIC) Shares and urged Union Finance Minister Nirmala Sitharaman to take stock of the country's biggest insurer company and to provide her guidance. In a series of tweets, the NCP leader said that although the markets are down it has not affected other life insurance stocks as hard as it did to LIC. She asked for a valuation as LIC Shares have crashed by almost 30 per cent from their listing price.  

LIC Shares have crashed by almost 30 per cent from their listing price. Should there not be an investigation of its valuation? With the erosion of value per share since listing, the small investors have been left to bear the losses. Yes, although the markets are down, other life insurance stocks including SBI Life Insurance (PSU) have not fallen so hard," she tweeted.

LIC crashes down 30 per cent from IPO issue price

On Monday, the share price of LIC crashed by around 6% as the end of the lock-in period for anchor investors intensified selling. LIC closed 5.85 per cent down at Rs 668.20 at the Bombay Stock Exchange (BSE) and the scrip hit a low of Rs 666.90 in within the day.

At the end of the day, LIC's share is 29.59 per cent down from its IPO issue price of Rs 949. The government-run insurer has closed in the red for the 10 straight trading sessions. During this period, it has lost around 20 per cent. Since its listing on May 17 at the stock exchanges, the scrip has closed in 

The initial public offering of LIC was subscribed 2.95 times, which was open for subscription from May 4 to May 9, 2022. LIC shares were allotted to investors at Rs 949 apiece. The Policyholders, employees and retail investors were offered discounts-- Policyholders received allotment at Rs 889 per share, whereas employees and retail investors got the shares at Rs 905 apiece.

The market capitalisation of the LIC of India stood at Rs 6,00,242 crore at the issue price of Rs 949. This has resulted in a crash of around 30 per cent in less than a month. At the end of 31st March 2022, the market share of LIC was 63.25 per cent in composite First Year Premium income.

Earlier, on May 17, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the weak debut of the country's largest insurer LIC on the bourses was due to unpredictable market conditions and suggested investors to hold on to the stock for long-term value.