Why LIC Share Price Is Falling?

LIC's IPO was the biggest IPO the country had ever seen. Through the IPO, the government liquidated 3.5% of its stake in the insurance behemoth..The IPO generated the biggest ever retail response to an IPO and was the third-largest globally. .The Rs 21,000 crore public issue received nearly three times subscription in a six-day long subscription IPO, unlike the usual three-day window. .However, post listing, the IPO didn't turn out to be a hit..On listing, LIC lost Rs 46,500 crore in value, as its market capitalisation fell nearly 8%. .Since then the stock hasn't recovered..In fact, shares of LIC are currently down 15% from the IPO price of Rs 949. The inherent volatility of the stock market has impacted the stock..Analysts believe that the insurance business is highly susceptible to equity market movements which could impact its embedded value. As a result, the stock has been in a downtrend..Inflationary concerns coupled with investor sentiments jittery about economic growth, also had a negative impact on LIC in the short-term..Not to mention the weak quarterly results posted by the insurance behemoth for the March 2022 quarter. .Weak Quarterly Results.Shares of the company fell earlier this week as the company posted a 17% YoY decline in consolidated net profit at Rs 2,410 crore for the March 2022 quarter..The insurer had earned a profit of Rs 2,920 crore in the same quarter a year ago. .However, the company's net premium income came in higher by 17.9% YoY at Rs 1.4 lakh crore from Rs 1.2 lakh crore in the corresponding quarter year ago. .Income from the first-year premium increased by 32.6% YoY while renewal premium increased by 5.4% YoY. .This is the first earnings statement after the company got listed on the bourses. .The company's income from investments came in at Rs 67,800 crore, almost flat compared to Rs 67,700 crore in the March 2021 quarter. .Its 13th-month persistency ratio stood at 69.2% compared to 73.9%..For the financial year 2022, LIC reported a profit of Rs 4,000 crore against Rs 2,900 crore in 2021. .LIC also did not disclose its latest Indian embedded valuation figure for the period ended March. The management said it is conducting an exercise to calculate the Indian embedded valuation, value of new business, and the margin of new business, which is expected to be completed by 30 June..Before its initial public offering, LIC said its embedded valuation was Rs 5.4 lakh crore. .The company announced a dividend of Rs 1.5 per share.About LIC.Life Insurance Corporation of India (LIC) is an Indian statutory insurance and investment corporation headquartered in the city of Mumbai, India. It is under the ownership of Government of India..The company was established on 1 September 1956, when the Parliament of India passed the Life Insurance of India Act that nationalized the insurance industry in India. .Over 245 insurance companies and provident societies were merged to create the state-owned Life Insurance Corporation of India..Today LIC functions with 2048 fully computerised branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices and a corporate office. .It's wide area network covers 113 divisional offices and connects all the branches through a metro area network. .LIC has also tied up with some banks and service providers to offer on-line premium collection facility in selected cities..Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. .This article is syndicated from Equitymaster.com.(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Why LIC Share Price Is Falling?

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