LIC shares gain 4.4%, top listing price
LIC) on Tuesday crossed the listing price of ₹865 for the first time since its shares were listed in May 2022. The stock gained 4.4% to close at ₹892.50 on Tuesday and is on course to cross the initial public offer price of ₹949 per share as investors perceive the insurance giant is cheaper valued compared to its private sector peers.
The stock hit an all-time high of ₹900 as the company's market capitalisation rose to ₹5.64 lakh crore, crossing the listing day market value of ₹5.53 lakh crore.
«Since the shares are trading below the embedded value, LIC remains in a favorable valuation zone,» said Avinash Singh, senior research analyst- insurance, Emkay Financial Services.
«In the current market scenario, LIC is a good value stock and is likely to perform well in the near term.»
LIC shares have gained 68% since March 29, 2023, when they hit their all-time low of ₹530.20 after dropping nearly 39% since listing.
Retail investors were allotted shares at ₹904 per share, a discount of ₹45 or 4.7% on the issue price during the IPO.
Analysts said that while the stock is a valuation play, the company may underperform its private rivals, which are perceived to be ahead in the race in terms of digitization plans and product offerings.
«LIC can be seen as a short-term tactical play, but the trend is not sustainable,» said Hemang Jani, an independent market expert. 'However, a 10-15% gain is likely in the short run."
Jani said that the recent uptick in the stock can be attributed to the strong PSU theme.
