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What LIC Investors Need to Know as LIC Share Price Drops to New All-Time Low

Shares of the Life Insurance Corporation of India (LIC) fell for the sixth session in a row on Tuesday. The share prices of LIC fell by more than 2% on both the Sensex and the Nifty. The BSE price of LIC shares decreased by 2.36 percent, or 18.35 points, to Rs 759.05 To reach Rs 759.70, the share price on the NSE fell by 2.27 percent or 17.65 points. With this reduction, the company's market capitalization dropped to Rs 4.8 lakh crore. It continues to be the eighth most valuable corporation in the nation.

Data reveals that since May 17, when shares of LIC went public, the company has only finished with a gain four times. It has fallen apart over the past few days due to selling pressure.

The majority of analysts are split on the stock and don't believe it has much room to rise.

The global trading business Emkay Global began covering LIC last week and referred to it as "the elephant that cannot dance" and claimed that the majority of its growth is already factored in. The broker continued by saying that the company's size, dominance in the market, and history will continue to act as barriers to its expansion.

The biggest obstacles to drastically altering the product and distribution mix are size and legacy. The main competitive advantage of LIC has been its extensive 13 lakh agent network, which has considerably higher productivity in comparison to private peers. This results in a classic par-heavy product mix, but it also comes at a cost of a big branch network and greater opex, it was noted in the research.

Emkay assigned the company a "hold" rating and set a target price of Rs. 875.

The LIC share price is under intense selling pressure as a result of recent short sales and long coverings, according to Ravi Singh, vice president and head of research at ShareIndia. The stock could reach 700 in the upcoming trading days if the selling persists. Although it is advised to sell the stock now, high-risk investors may decide to cling to their positions and watch for a trend reversal.

The insurance behemoth LIC Ltd. is currently trading below its IPO price, according to Santosh Meena, Head of Research at Swastika Investment Ltd. The issue was offered at a discount to its domestic and international peers, with a price to the embedded value of 1.1x. This value discount raises worries for the company due to factors such as short-term persistency ratios, weaker profitability and revenue growth in comparison to private companies, and market share losses to these players. But we think India is seriously underserved. The market for life insurance is still in its infancy and is ideally situated to take advantage of the tremendous development potential. LIC offers many competitive advantages, such as a solid brand value, a sizable agent network, and an impressive distribution network. Therefore, long-term investors can purchase this stock at CMP using a buy-on-dip approach.

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