In early trading, LIC adds 2%, halting a 10-day losing run

14 Jun 2022 , 09:58 AM

On Tuesday (14-06-2022), Life Insurance Corp Of India surged over 2% on increased volumes after losing for the previous ten days.

On the BSE, the stock reached a high of Rs 682. The stock was trading at Rs 678 on the BSE at 9.30 a.m., up 1.5 percent from its previous close. Since its first public offering, LIC has lost 28% of its value from its issue price of Rs 949 per share.

After a Rs 21,000 crore initial public offering, the stock was listed on May 17th (IPO). Since the IPO, about Rs 1.7 trillion in investor capital has been lost.

Other life insurance companies have also experienced significant losses this year. SBI Life is down 6%, HDFC Life is down 11%, ICICI Prudential Life is down 5%, and Max Financial Services Ltd is down 17%.

After the lock-in period for anchor investors in the IPO ended on Monday, LIC reached an all-time low.

“In the last six months, life insurance stocks have underperformed the Nifty index, largely due to concerns about rising interest rates and moderating ‘individual protection’ growth, as well as expectations of lower non-PAR (non-participating insurance) sales in a rising rate scenario,” according to PhillipCapital.

“While some of these worries are genuine, we feel they will have a limited impact. We remain optimistic about the industry, expecting VNB (value of the new business) growth to remain strong (16-19% two-year compound annual rate) and margins to improve in the medium term. Our top options in the area are SBI Life and HDFC Life “PhillipCapital was added to the mix.