Shares of Life Insurance Corporation of India slipped below the ₹800-mark on Monday and hit the lowest level since listing on the bourses last month.
Scrip of the life insurance behemoth hit an all-time low of ₹774.5 apiece on the BSE on Monday, before closing 2.86 per cent lower at ₹777.4 apiece. On the NSE, the insurer’s scrip fell to a 52-week low. It plunged 2.97 per cent to close at ₹776.5 apiece.
LIC’s market capitalisation has also fallen below ₹5 lakh crore and is now at ₹4,91,705.32 crore on the BSE.
LIC had an issue price of ₹949 a piece and had listed at an 8 per cent discount on the stock exchanges on May 17.
Quarterly results post-listing
The insurer had on May 30 announced its fourth quarter results with an 18 per cent drop in net profit on a year-on-year basis to ₹2,371.55 crore for the quarter ended March 31, 2022.
For fiscal 2021-22, its net profit shot up by 39.4 per cent to ₹4,043.12 crore from ₹2,900.56 crore in 2020-21.
The board of LIC has recommended a maiden dividend of ₹1.50 per equity share.
Brokers remain sceptical
Brokerage Emkay Global Financial Services had last week initiated coverage on LIC with a hold rating and a target price of ₹875 apiece.
Calling it “the elephant that can’t dance”, the brokerage said, “While we appreciate LIC’s market-leading position and comfortable valuations, we prefer private sector peers that have better growth, profitability and, therefore, higher RoEV prospects.”
Explaining the rationale behind its neutral view, Emkay said LIC has low value of new business relative to embedded value, lower APE growth and margin prospects versus its private sector peers, and inherent volatility in embedded value at about 35 per cent of non-par assets are in equity, and no track record of EV movement under the new fund bifurcation structure.