At 6 trn, LIC m-cap surpasses HUL, ITC; stock hits all-time high, surge 5%

LIC stock news: In the past one month, the market price of LIC has zoomed 25 per cent as compared to less than 2 per cent gain in the benchmark index

Life Insurance Corporation of India (LIC) hit an all-time high of Rs 948, ralling 5 per cent on the BSE in Saturday's intraday trade, in an otherwise range bound market, amid heavy volumes. The stock of the state-owned insurer surpassed its previous high of Rs 920, which it touched on its listing day on May 17, 2022.

In comparison, the S&P BSE Sensex was trading flat at 71,699 at 01:41 PM. The average trading volumes on the counter more than doubled with a combined 6.6 million equity shares changing hands on the NSE and BSE.

In the past one month, the market price of LIC has zoomed 25 per cent as compared to less than 2 per cent gain in the benchmark index. The stock has recovered 79 per cent from its 52-week low level of Rs 530.20 touched on March 29, 2023.

A sharp rally in the stock price has pushed the market capitalisation (market cap) of LIC towards Rs 6 trillion. Currently LIC's market cap stands at Rs 5.96 trillion, surpassing the fast moving consumer goods (FMCG) majors ITC (Rs 5.87 trillion) and Hindustan Unilever (Rs 5.83 trillion). LIC also surpassed State Bank of India (SBI) (Rs 5.6 trillion) to become the country's most valued PSU firm by market valuation on Wednesday.

The government had issued shares at Rs 949 apiece to qualified institutional buyers (QIBs) and high networth individuals (HNI). The issue price was Rs 889 for policyholders and Rs 904 for retail investors and employees.

As on December 31, 2023, the President of India, the promoter of LIC, held 96.50 per cent stake in the company.

Of the 3.5 per cent public shareholding, individual shareholders held 1.97 per cent stake, followed by mutual funds (0.79 per cent), and foreign portfolio investors (0.06 per cent), as per shareholding pattern data.

Meanwhile, LIC has received a notification for a tax refund worth Rs 25,464 crore from the Income Tax Department for 7 Assessment Years (AYs) from 2012-13 to 2019-20 except for 2015-16. This is related to the interim bonus paid to policyholders during the assessment period.

Life insurance density and penetration age continues to be lower in India vis-à-vis other developing economies. With gradual rise in domestic household savings, the share of life insurance in incremental household financial saving is expected to increase steadily.

Post Covid-19, most of the insurers have formulated various Risk Management Policies such as Risk-Management Strategy, Business Continuity, Crisis Management, Disaster Management, and stricter Cyber Security Management policies as a part of their Risk Management process for better achievement of goals.

"Emerging regulatory initiatives like Bima Sugam, Bima Vahaak, Account Aggregator are being looked upon as ways for bridging the protection gap in life insurance as well as for increasing the life insurance penetration in rural India, which is still highly under-penetrated. Further relaxations in the tie-up limit of the distribution system are pegged to deepen the penetration in India and enable policyholders to have a wider choice of products that are more aligned with their unique requirements," LIC said in its FY23 annual report.