Life Insurance Corporation (LIC) shares entered the S&P BSE IPO index on Thursday, May 19.

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The index — which tracks the performance of newly-listed companies on BSE — fell as much as 3.2 percent during the session.

Companies with a minimum float market value of Rs 100 crore on the listing day make it to the BSE IPO. They are removed from the index after completing two years since listing.

LIC shares fell as much as 2.3 percent to a fresh low of Rs 855.8 apiece on BSE. At this level, the stock took its discount to the issue price of Rs 949 to 9.8 percent.

The state-run life insurer's shares debuted in the primary market on Thursday, May 17 at a discount of eight percent.

Many analysts are positive on LIC shares.

"LIC is trading at a price to embedded value (embedded value) of around 1.08 times, which is at a significant discount to other listed private life insurance companies like HDFC Life, ICICI Prudential Life and SBI Life. As expected, given the adverse market conditions, the LIC listing has been muted," said Yash Gupta, Equity Research Analyst at Angel One.

However, he also said that LIC's cheap valuations in comparison to its listed peers offer comfort. "Investors with a longer time horizon can hold on to their positions... Retail traders with a short-term view can exit their positions in case there is any upside movement over the next few days," he said.

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