New Delhi: The Initial Public Offering (IPO) of Life Insurance Corporation of India (LIC) in 2022 was one of the much-awaited events for the stock market investors. However, what happened next was nothing short of a nightmare for India’s shareholders. Insurance giant. So far, LIC’s IPO losses are over $18 billion, losing almost a third of its valuation.
On Friday, LIC’s stock closed down 3.2% at Rs 661.70. From the issue price of Rs 949, the stock is down more than 30%, causing huge loss of money for the investors. (Also Read: Want Petrol? Get Token First! Sri Lanka’s New Policy To Ration Fuel)
Moreover, as per the target prices of global brokerages, the shares of the government insurer are unlikely to surpass the IPO price even a year from now. For instance, Bank of America (BofA) best target of Rs 930 is still lower by 2% than the issue price of Rs 949. (Also read: Credibility, decisive leadership made India grow: Piyush Goyal)
On the other hand, Goldman Sachs’ target price of Rs 700 is 35 per cent lower than the issue price. At the same time, JP Morgan’s target price of Rs 840 is 13 per cent lower than the issue price. Most of the target prices are projected for the end of the current fiscal year in 2023.
According to a recent report by Bank of America, however, LIC has room for growth. Brokerage firms believe that LIC stock is available at a discount of 47-70% as compared to private companies.