Life Insurance Corporation (LIC) shares rose on Wednesday after the state-run life insurer's Chairman, MR Kumar, said there is no need for investors to be concerned about the company's business. In an exclusive interaction with CNBC-TV18, he said the recent decline in the stock is in the backdrop of broader weakness in the market, which is concerning.
"LIC has been doing very well strongly in the last couple of months at least. We are growing at the same rate as the private industry, and in some metrics even better than that," Kumar said.
The LIC stock extended gains to a second straight day on Wednesday, in some relief for investors after a series of lows in tandem with overall weakness in the market.
It jumped by as much as more than five percent during the session before settling at Rs 690.5, up by Rs 16.3 or 2.4 percent from its previous close.
At the current price, the stock is at a discount of 25 percent to its IPO price. In other words, those who won allotment in the LIC IPO still have a quarter of their money to recover.
Kumar said investors have to remain patient for some time and look out for good signs. He said the company has begun an internal transformation process that will take some time.
"Going ahead, people can look at better dividends but then how it will be is something I cannot say," said Kumar.
LIC has regained market share of 3-4 percent in the past few months, he said, adding that going forward, the company will be able to demonstrate its ability to grow and retain leadership.
He also said LIC may tweak some of its products to make them more cost-effective.
LIC shares have completed a month in the listed space. Its stock began the journey on bourses BSE and NSE with a weak listing on May 17, and has struggled to cross the issue price ever since.
"If I am going to be in a hurry to make money, I don’t think this is a counter for me. However, if I am going to be a little patient and want to be in this particular sector, I think it is a great buy at current levels,” said Sudip Bandopadhyay, Group Chairman of Inditrade Capital.
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The state-run life insurer's IPO — which was open for bidding from May 4 to May 9 — had seen an overall subscription of almost three times.
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