LIC Stock Jumps: Hits Rs 1,000 on Govt’s Value Drive

by | Feb 5, 2024 | 0 comments

LIC Stock Jumps: Surpasses IPO Price and Elevates Market Cap

Remarkable Rise in LIC’s Share Price:

On February 5, a significant increase of 6.5 percent was witnessed in the share price of Life Insurance Corporation of India (LIC), reaching Rs 1,005.7. This jump not only exceeded the IPO price of Rs 949 but also elevated the insurer’s market capitalisation beyond the Rs 6-lakh crore mark. The impressive performance of LIC stock jumps to the forefront of market news.

LIC Overtakes SBI as Most Valued PSU:

Mid-January saw LIC surpassing the State Bank of India (SBI) to become the most valued public sector undertaking. While LIC’s market capitalisation soared, SBI’s share price experienced a 1.11 percent decline to Rs 643.2 on Monday, with its market cap standing at Rs 5.77 lakh crore.

Three-Month Surge in LIC Stock:

Over the past three months, more than a 55 percent surge has been recorded in LIC stock. Efforts to retain market share in a profitable manner are being vigorously pursued by LIC, as noted by Pandey. This strategy includes the discontinuation of some high-growth products and the introduction of several non-participating (non-par) products.

LIC’s Strategic Moves and IPO Recap:

The largest insurer in the country, LIC, was listed on the exchanges in May 2022, following the government’s sale of over 22.13 crore shares, or a 3.5 percent stake, through an offer-for-sale. After the IPO, the government’s holding in LIC was maintained at 96.5 percent.

Despite an initial downward trend post-listing, with a 26 percent decline by November 2023 from its listing price, a recent surge in LIC stock jumps has been attributed to the launch of the special scheme, Jeevan Utsav, and the positive reception of its non-par products.

Market Analysts on LIC’s Performance:

Kotak Institutional Equities, in a January report, highlighted the potential of LIC’s marketing force to effectively promote non-par policies. The brokerage retains a “buy” rating on LIC, citing its attractive valuations and setting a price target of Rs 1,040.

Future Prospects and RBI Approval:

The Reserve Bank of India’s recent approval for LIC to acquire up to a 9.99 percent stake in HDFC Bank by January 2025 has been well-received. Currently, a 5.19 percent stake in the bank is held by LIC. Plans to launch three to four products in the coming months are underway at LIC, aiming for double-digit growth in new business premiums.

 

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