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LIC sinks 15% from highs, market value falls briefly below Rs 5 lakh crore

Shares of the company have remained under pressure since their listing on rising concerns over its ability to compete with nimbler private sector rivals

Shares of Life Insurance Corporation of India have fallen close to 15 percent from their post-IPO high of Rs 920 in less than three weeks of listing on May 17.

 

On June 6, the stock fell nearly 2 percent to hit a new low of Rs 785 with its market capitalisation briefly declining below Rs 5 lakh crore.

 

Shares of the company have remained under pressure since their listing on rising questions over its ability to compete with nimbler private sector rivals and the impact of ongoing market volatility on its embedded value.

 

Last week, brokerage firm Emkay Global Financial Services initiated coverage on the stock with a ‘hold’ rating and price target of Rs 875 per share.

 

“LIC’s valuation on price-to-embedded value appears cheaper when compared with listed private players; this is justified by the fact that LIC adds merely 1.0-1.5 percent of EV each year from VNB, as against 8-11 percent in the case of private life insurers,” Emkay Global said in a note.