Investors who are continuously suffering losses in LIC’s stock are confused as to what to do. Stay in the stock or sell it out when there is a slight rise.
LIC Stock Price: The fall in LIC’s stock is not stopping. Today i.e. on June 6, the stock went below Rs 800 and came down to a low of Rs 782.45. This is a new record low for the stock. Before this, the stock had made a low on Friday as well and closed at Rs 800. The stock is now trading 18 percent weaker than its issue price i.e. IPO price. Investors suffering constant losses in the stock are confused as to what to do. Stay in the stock or sell it out when there is a slight rise. Investors have lost more than 1 lakh crore in LIC so far.
Market cap below 5 lakh crore
The market cap of LIC has gone below 5 lakh crores in today’s business. The market cap of the company has been reduced to 4.96 lakh crores till 1 pm today. While the valuation of the company was estimated at 6 lakh crores during the IPO. In this context, till now the investors of LIC have suffered a setback of 1.04 lakh crores.
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LIC’s stock was listed in the market on 17th May. The company’s shares were listed on BSE at Rs 867, while the issue price was Rs 949. In this sense, the stock was listed in the market at a fall of Rs 82 from its issue price. At the same time, today the share fell 18 percent from the issue price to Rs 782.45. The high for the stock is Rs 919 and the low of Rs 782.45 so far.
what investors to do in shares
Anuj Gupta, VP-Research, IIFL, says that there is no concern about LIC’s outlook as of now. The company is the market leader in insurance and has a significant market share. Strong network across the country. There is dominance especially in small towns and rural areas. On the other hand, if we talk about the stock, the issue price in LIC has come down significantly. The stock is at a discount of 17 to 18 per cent from the IPO price. This is a great shopping opportunity. Share should be bought at the current price. It may soon see a level of Rs 830 to Rs 850.
Brokerage house Emkay Global has given a hold rating in the stock and has given a target price of Rs 875. The brokerage house says that LIC is the market leader in the insurance sector, while the valuations are better than Pierce. But the VNB margin expansion is less than expected. APE growth is also weak compared to private sector peers. Higher commission cast is also a factor. The market size of the company is gradually decreasing. The market share of private companies is increasing.
Swastika Investmart Ltd. Santosh Meena, head of research, says that investors who have stocks, they can keep it in the portfolio for a long period. In the next 5 years, the management expects the company’s margins to reach the overall industry average. The company’s profit has increased by 40 percent in the financial year 2022. Management expects clarity on VNB margins and EV after the June 2022 report.
Concerns about profits
LIC has made a profit of Rs 2409 crore in the March quarter, which is 17.41 percent less than the same period a year ago. At the same time, the company’s profit during the entire financial year stood at Rs 4043.12 crore, which is 39.4 percent higher on a yearly basis. LIC’s total revenue for the quarter ended March 2022 stood at Rs 2,11,471 crore, which is an increase of 11.64 per cent year-on-year. The company has declared a dividend of Rs 1.50 per share. Net premium income increased to Rs 1,44,158.84 crore during the March quarter. The company’s income from renewal premium has increased by 5.37 percent to 71,472.05 crore.