Shares of Life Insurance Corporation of India (LIC) on Wednesday extended their fall for the fifth straight session. LIC’s market capitalisation (m-cap) has shrunk around Rs 65,400 crore. The market valuation declined to Rs 3,78,740 crore today from Rs 4,44,141 crore, closing value on January 24. And, the stock has tumbled 14.73 per cent in five days.
The plunge in LIC share price comes at a time when Adani Group stocks are dwindling. Adani stocks started falling after a report by US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades. Adani Group, however, refuted the claim as baseless.
The state-run insurer has said that it would seek clarifications from Adani’s management on the short seller report. LIC held a 4.23 per cent stake in the flagship Adani firm (Adani Enterprises), while its exposure to Adani Ports stood at 9.14 per cent and 5.96 per cent in Adani Total Gas.
The insurance giant was also a key investor in Adani’s recent share sale. The Rs 20,000 crore follow-on public offering (FPO) from Adani Enterprises got sailed through and was fully subscribed after high-net-worth individuals and institutional investors bid strongly. Though, the offer received poor to tepid response from retail investors and employees.
Further, all of the 10 listed Adani Group stocks (including recently acquired ACC, Ambuja Cements and NDTV) fell sharply today after a report claimed that Credit Suisse had stopped accepting bonds of Adani companies as collateral for margin loans to its private banking clients.
On the technical front, support on the LIC counter could be seen at Rs 588, an analyst said. “LIC stock price now finds support at Rs 588. A daily close below this level could lead to Rs 520 on the daily charts. Resistance will be at Rs 639,” said AR Ramachandran from Tips2trades.
The stock traded lower than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 22.40. A level below 30 is defined as oversold while a value above 70 is considered overbought.
Adani Total has an average target price of Rs 865.67, Trendlyne data showed, suggesting a potential upside of 44.65 per cent.
Around 8.16 lakh shares changed hands today on BSE, which was more than eight times compared to LIC’s two-week average volume of 96,000 shares. Turnover on the counter stood at Rs 50.14 crore, commanding a market capitalisation (m-cap) of Rs 3,78,740.86 crore.
Meanwhile, Indian equity benchmarks ended mixed amid highly volatile trade. The 30-share BSE Sensex pack rose 158 points or 0.27 per cent to close at 59,708; while the broader NSE Nifty index moved 46 points or 0.26 per cent down to settle at 17,616.
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