It has not been the best of weeks for the Life Insurance Corporation of India (LIC). The company felt like they had to reduce their pre initial public offering valuation and the shares still got exchanged at a discounted price due to lower interest and other economic constraints and ambiguity. Experts have however said that due to it being a public company, the main attractiveness of its shares are stability which could be a major factor in people reconsidering purchasing shares of the corporation especially now that they are being traded at below the original listing price.
Prior to the discount, the price per share stood at a mighty Rs. 949. But fast forward a week and it is now being traded at Rs. 867 on the Bombay Stock Exchange. This is a 5% discount on the original listed price of Rs. 949. The employees of the company and their clients who have taken out insurance policies from the Life Insurance Corporation of India (LIC) are entitled to a discount worth Rs. 45 and Rs. 60 respectively to the traded price.
This is quite disheartening for the people at LIC as their competitors’ shares like HDFC Life, ICICI Pru Life, and SBI Life are being traded at a much higher price, the latter of which is also a government owned company but is still able to compete with the private top dogs of the industry.
Many experts have said that their low valuation especially when compared to their competitors who went publicly listed in the past, along with going public at a time like this where global supply chains have been hit hard along with high gas prices and geopolitical instability have caused a low demand and a fall in the price per share.
With LIC now offering their shares at a much lower price than it was originally, it might just be attractive to purchase them and accumulate shares and grab a hold of them before they become a more attractive and lucrative investment to others. Once that happens, the price of each share will rise, and its always great to hop on trends early according to Vivek Gupta, the chief executive officer, and director on the board of Mastech Digital.
Many people did not expect that the price per share of LIC would slump like this considering that their competitors have been doing so well, but that is just how it is, but it seems like their fortunes might just turn around soon.