Why LIC Share Price Is Falling?
Life
Insurance Corporation (LIC) IPO was one of the biggest IPO in the country and generated
the highest ever response from the retailers. However, after its listing, the
IPO did not turn out to be a hit. Even on the listing day, LIC lost Rs. 46,500
crore value and its market cap fell nearly 8%. The share price of LIC is now
trading near the lowest value from its IPO price of Rs. 949.
The
question that is in everyone’s head is why the stock price falling
continuously. The main reason why $2.7$ billion is a flop is that the central
banks across the globe have started raising interest rates to battle the rising
inflation pressure. This had led to pressure on the stock and it has curbed its
demand.
Read - What is EBITDA : Meaning, Calculation & Advantages
Another
reason that added pressure to the stock price of LIC is selling by anchor
investors. The anchor investors who were holding 59.3 million shares have shed
their holdings. Anchor investors are the institutional investors who have been
allotted shares before the IPO opens for the subscription. This massive selling
of LIC stock by the anchor investors has shaken the confidence of retail
investors and therefore, the stock continuously faces selling pressure.
What
added fuel to the fire was the weak quarterly numbers by LIC. Shares of the
company further fell when it posted a 17% YoY decline in its consolidated net
profit at Rs. 2,410 crore for the March 2022 quarter. In the same quarter a
year ago the company had earned a profit of Rs. 2,920 crore. However, the
company reported a rise in the net premium income by 17.9% YoY at Rs. 1.4 lakh
crore from Rs. 1.2 lakh crore in the corresponding quarter last year. The
income of the company from investments remained flat at Rs. 67,800 crore in
comparison to Rs. 67,700 crore in March 2021 quarter.
Check LIC Share Price - https://www.indiratrade.com/company-profile/life-insurance-corp