LIC Share Price: LIC shares increased rapidly, if you know the reason then you will buy it as soon as the market opens.
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LIC Share Price: There was a stormy rise in the Indian stock market on the last trading day of the week. The Sensex based on 30 shares closed at 71,106.96 points with a gain of 241.86 points or 0.34 percent. At one time during trading it had climbed up to 394.45 points. National Stock Exchange’s Nifty also closed at 21,349.40 points with a rise of 94.35 points or 0.44 percent. Meanwhile during the day, shares of Life Insurance Corporation of India (LIC) closed with a rise of about four percent on Friday. During the day’s trading on BSE, the company’s shares rose 7.25 percent to reach a 52-week high of Rs 820.05. Finally it closed at Rs 793.10 with a rise of 3.73 percent. The company’s shares closed at Rs 792.20 on NSE, up 3.62 percent. During the day’s trading, it jumped 7.39 percent to Rs 821, which is its 52-week high. The market valuation of the company also increased by Rs 18,057.88 crore to Rs 5,01,635.57 crore.
Why did share prices increase?
There has been a surge in LIC’s shares after the government allowed it to achieve 25 percent minimum public shareholding (MPS) within 10 years. The country’s largest insurance company LIC was listed in May 2022. The government had sold more than 22.13 crore shares or 3.5 percent stake in LIC through initial public offering (IPO). At present the government has 96.5 percent stake in the company. In the last one month, LIC shares have increased by about 30 percent. While an increase of about 24 percent has been recorded in 6 months, there has been an increase of 16 percent in one year. In the information given to the stock exchange, LIC said that the Department of Economic Affairs has given ‘one time exemption to LIC to achieve 25 percent minimum public shareholding within 10 years from the date of listing i.e. by May 2032. The government had earlier this year amended the rules to allow listed public sector companies and banks to be exempted from the requirement of 25 per cent minimum public shareholding even after privatization as per the need in public interest.
IPO price still far away
LIC had launched IPO in the market this year. The listing of these shares took place on 17 May 2022. However, after the listing, there was a decline in the company’s shares. The company’s shares were listed in the market with a discount of about 9 percent. The size of this IPO with government stake was Rs 20,557 crore. It was subscribed 2.95 times. If we compare the shares of LIC with the IPO, at present the shares of the company are around 800. Whereas, the price band of IPO was fixed at Rs 902 to Rs 949. It is clear from this mathematics that the shares allotted in IPO are still in loss. However, the losses have reduced slightly due to the company’s shares rising 24 percent in the last six months.
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