LIC’s Remarkable Resurgence: Shares Surge to New Heights In a striking turn of events, the shares of Life Insurance Corporation (LIC), India’s largest life insurer, have soared by an impressive 5.30% in today’s intraday trading, reaching ₹900 apiece. This marks a significant milestone, propelling the stock to levels not seen since its listing in May 2022 and establishing a new 52-week high. The insurance giant’s journey on the stock exchanges has been one of resilience and resurgence.
A Look Back: Listing and Initial Challenges
LIC was listed on the Indian stock exchanges on May 17, 2022, at ₹875.25 apiece, a modest start compared to the issue price of ₹949. Post-listing, the shares faced substantial downward pressure, hitting an all-time low of ₹530 by March 2023, reflecting challenges in the early phases of market participation.
Turnaround and Upward Momentum
However, the narrative took a positive turn in the subsequent months, notably in November, when the stock witnessed a robust upward momentum, registering a commendable gain of 12.83%. This positive trend continued into December, with a remarkable rise of 22.52%. In the current month, the stock has further increased by 7.51%. Notably, the shares are now just 6.21% away from their IPO price.
Impressive Market Capitalization Growth
From November till now, LIC’s market capitalization has surged by a staggering ₹1.84 lakh crore, reaching an impressive ₹5.64 lakh crore. This surge highlights the renewed investor confidence and the company’s ability to rebound from initial challenges.
Government Intervention and Exemption
In a significant development in December, the government granted a one-time exemption to LIC, allowing it to achieve the required 25% minimum public shareholding (MPS) within 10 years. Originally mandated to meet the 25% MPS rule by 2027, this exemption provided a strategic breathing space for the insurance behemoth.
As of the end of Q3 FY24, the government holds a 96.5% stake in LIC, while retail investors and domestic institutional investors hold 2.4% and 1% stakes, respectively.
Strategic Product Introduction and Analyst Insights
In November, LIC introduced a new non-par product, LIC Jeevan Utsav, featuring a combination of limited pay (5–16 years) with lifelong income. Analysts view this non-par segment as value-adding, suggesting that an increase in its share can enhance LIC’s overall margins. This strategic product move showcases LIC’s commitment to innovation and adaptability in meeting customer needs.
Robust Financial Performance
On the financial front, LIC reported a net profit of ₹17,469 crore in H1FY24, showcasing a notable growth from ₹16,635 crore in the same period a year ago. The new business premium (individual) for H1FY24 witnessed a healthy jump of 2.65% to ₹25,184 crore from ₹24,535 in H1FY23, underlining the company’s consistent performance in attracting new business.
AUM Growth and Long-Term Outlook
The assets under management (AUM) also experienced a significant increase, reaching ₹47,43,389 crore in H1FY24 compared to ₹42,93,778 crore in the same period last year, reflecting a robust year-on-year increase of 10.47%. This growth reinforces LIC’s position as a key player in the insurance and financial services sector.
LIC’s resurgence in the stock market is a testament to its resilience, strategic initiatives, and investor confidence. The recent surge to new heights signifies a positive trajectory, and as the company continues to navigate market dynamics, investors and industry observers alike are keenly watching the unfolding chapters of LIC’s remarkable journey.