A Comparative Analysis of Stock Market Performance of Life Insurance Corporation of India

Abstract

It has been almost 2 years since the listing the IPO of Life Insurance Corporation of India (LICI), the biggest so far in the Indian stock market. It was one of the most talked about ones as the size of the IPO was the biggest ever and huge expectations were built around it. Now, it is time to analyse whether the stock has met those expectations or fallen short. It was issued at `949, listed at `867.20, reached the maximum of `1181, and also touched the lowest at `531 during the last 2 years. The article aims to capture the journey so far, compare it with that of benchmark NIFTY 50 and its nearest competitors, and also examine and compare the fundamental of the firm with its nearest competitors. The study takes into accounts stock prices of firms from the listing date till the end of July, 2024. Key financial data on the variables of LICI and close competing firms were collected from annual reports for the past 5 financial years. It was observed that LICI stock has underperformed compared to its nearest competitors while it had very strong financial fundamental measured in terms of current ratio, Return on Net Profit Margin, Return on Net Worth, debt equity ratio Assets Turnover Ratio. So, investors can expect the stock to rally to newer highs in time to come. Up until now, no research has captured the stock market performance of LICI and compared with it with its nearest competitors since the listing of the much-expected public issue. Further, the study also captures and compares the fundamental strengths of LICI with its nearest competitors for last 5 financial years.

Keywords: IPO, Listing, Discount, Premium, Underperformance

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