On Wednesday, January 17, the shares of Life Insurance Corporation of India Ltd. (LIC) achieved a significant milestone by surpassing its listing day price of ₹904, reaching an intraday high of ₹918.45. This marks a notable uptrend for the stock, which had previously exceeded both its listing price of ₹867 and the policyholders’ allotment price of ₹889.
Over the past month, LIC’s shares have seen an 11% increase, with a remarkable surge of 43% over the last six months. The stock has demonstrated robust growth, rising by 70% from its 52-week low of ₹530.
The positive momentum in LIC shares can be attributed to the optimistic outlook provided by Chairman Siddhartha Mohanty. In November and December of the previous year, the stock experienced a surge of 12% and 22%, respectively, following Mohanty’s expression of confidence in achieving double-digit growth in new business premiums for the financial year 2024.
LIC has now emerged as India’s most valuable Public Sector Undertaking (PSU), surpassing the State Bank of India (SBI). The current market capitalization of LIC stands at ₹5.75 lakh crore, compared to SBI’s ₹5.64 lakh crore. It’s worth noting that the government still holds a substantial 96% stake in LIC, contributing to a low float in the market.
Since its listing in May 2022, LIC’s stock has not revisited its retail IPO price of ₹904 or the original IPO price of ₹949. Retail shareholders and LIC policyholders enjoyed discounts of ₹45 and ₹60 per share, respectively, during the IPO.
Deepak Shenoy of CapitalMind expressed optimism about LIC’s future, anticipating its position among the top eight most profitable companies in India over the next two years. Brokerage firm Kotak Institutional Equities, considering LIC’s non-par product Jeevan Utsav, deemed the valuation as “inexpensive” and retained a “buy” recommendation with a price target of ₹1,040.
Gaurav Bissa of InCred Equities highlighted LIC’s positive trend, suggesting that overcoming the hurdle at ₹920 could propel the stock toward ₹1,100 levels. As of now, LIC shares are trading at ₹908.30, reflecting a 1.8% increase.
