Mumbai: In today’s intraday trading, the shares of Life Insurance Corporation (LIC), India’s largest life insurer, surged by 5.30% to reach ₹900 each. This accomplishment marks a level not observed since its initial listing in May 2022 and stands as the stock’s new 52-week high. The insurance giant was introduced to the Indian stock exchanges on May 17, 2022, at ₹875.25 per share, in contrast to the initial issue price of ₹949.
Following its listing, the shares encountered substantial downward pressure, touching an all-time low of ₹530 by March 2023. However, a noteworthy reversal took place in the ensuing months, characterized by a particularly strong upward momentum, culminating in November with a notable gain of 12.83%.
The favorable trend persisted into the subsequent month, witnessing a remarkable surge of 22.52%. In the current month, the stock has continued its upward trajectory with a further increase of 7.51% so far. At present levels, the stock is only 6.21% below its initial public offering (IPO) price.
Since November, the company’s market capitalization has experienced a substantial surge, increasing by ₹1.84 lakh crore and reaching the current level of ₹5.64 lakh crore.
In December, the government provided a one-time exemption to LIC, allowing it to fulfill the mandated 25% minimum public shareholding (MPS) within 10 years, extending the deadline from the original requirement of achieving the 25% MPS rule by 2027.
As of the end of Q3 FY24, the government retained a 96.5% stake in the company, with retail investors and domestic institutional investors holding 2.4% and 1% stakes, respectively.
In November, LIC launched a novel non-par product called LIC Jeevan Utsav, which incorporates a blend of limited pay (5–16 years) with a lifelong income component. Analysts posit that the introduction of this non-par segment is seen as a value addition, and an expansion of its market share in this category could potentially contribute to enhancing LIC‘s overall margins.
In terms of financial performance, the company disclosed a net profit of ₹17,469 crore in H1FY24, reflecting a growth compared to the net profit of ₹16,635 crore in the corresponding period of the previous year.
Additionally, the new business premium (individual) for H1FY24 exhibited a rise of 2.65%, reaching ₹25,184 crore in contrast to ₹24,535 crore in H1FY23. The new business premium represents the premium payable in the initial policy year of a life insurance contract.
The assets under management (AUM) saw a notable increase, reaching ₹47,43,389 crore in H1FY24, compared to ₹42,93,778 crore in the corresponding period of the previous year. This signifies a robust year-on-year growth of 10.47%.