The LIC Board and administration ‘have been continuously engaged’ in enhancing its efficiency parameters and the efficiency of the lately listed insurance coverage behemoth’s shares have to be analysed over an extended interval, the Finance Ministry advised the Rajya Sabha on Tuesday.
“The market capitalisation of a listed entity changes on a continuous basis, based on a small volume of shares traded in the market,” Minister of State for Finance Bhagwat Kishanrao Karad advised the Parliament in a written reply to a question from MP Raghav Chadha.
Mr. Chadha had sought to know the the explanation why shares of LIC ‘wiped out over ₹1.5 lakh crore of investors’ capital, turning into one of many largest wealth guzzlers of latest instances’. Mr. Chadha additionally requested why LIC shares have been ‘continuously crashing’ available in the market and the steps taken by Government to make sure that they ‘do not touch new lows every day’.
“The stock market performance of a particular stock needs to be analysed on a medium to long-term basis for a newly listed entity. There are several factors that affect the trading price of an entity such as geo-political factors, global and national macro-economic environment and perceptions of market participants on the prospects of a particular sector and/or the entity,” the minister mentioned.
“The LIC Board and management have been continuously engaged in strengthening and improving the performance parameters, keeping in view the interest of policyholders, shareholders and other stakeholders,” he emphasised.
The authorities had offered 3.5% of its stake in LIC by way of an preliminary public provide this yr which fetched about ₹21,000 crore at a difficulty worth of ₹949 a share. Since its itemizing on May 17, the LIC inventory has been trending down and closed at ₹675.50 apiece on Tuesday.
Source: www.thehindu.com