LIC slips 3% as reports suggest govt to sell 2-3% stake; NBP falls 22% YoY

Life Insurance Corporation of India (LIC) shares declined 2.9 per cent on BSE, logging an intraday low at Rs 731.8 per share. The stock slipped after the life insurance company reported a 22 per cent drop in new business premiums (NBP) and reports also suggested that the government is planning to offload 2-3 per cent stake in the company.

 

Around 12:37 PM, LIC share price was down 2.21 per cent at Rs 737.45 per share on BSE. In comparison, the BSE Sensex was down 0.48 per cent at 73,749.58. The market capitalisation of the company stood at Rs 4,66,436.96 crore. The 52-week high of the stock was at Rs 1,221.5 per share and the 52-week low was at Rs 715.35 per share. 

 

The government's stake sale aligns with its plan to meet the regulatory requirement of a 10 per cent public shareholding by 2027. The stake offloading is expected to be done in tranches provided market conditions are conducive. 

 

Meanwhile, the Department of Investment and Public Asset Management (Dipam) under the Ministry of Finance has begun to invite bids from merchant bankers and legal advisors to oversee the sale of minority stakes in several public sector banks (PSBs) and financial institutions, including LIC, over the next three years.   

 

The centre holds a 96.5 per cent stake in LIC, following the insurer’s initial public offering (IPO) in May 2022, which raised approximately Rs 21,000 crore through a 3.5 per cent stake sale.  

 

Besides, as per the Life Insurance Council figures, the NBP of LIC dropped to Rs 15,513.95 crore while private companies reported a 3.24 per cent growth to Rs 14,471.62 crore.

 

NBP is the premium collected by life insurers from new policies for a particular year. It is the sum of the first-year premium and single premium, reflecting the premium from new businesses.

 

Among large private players, the premium of the largest private life insurer, SBI Life, also dropped 18 per cent.

 

Other private players posted healthy growth. HDFC Life’s NBP rose by 23.5 per cent, ICICI Prudential Life Insurance’s 5.3 per cent, and Bajaj Allianz Life’s 2.88 per cent. Axis Max Life Insurance’s premium slipped 5.9 per cent. 

 

In the past one year, LIC shares have lost 23 per cent against Sensex's rise of 0.58 per cent.