LIC soars 6%, crosses the Rs 1,000-mark for the first time ever

The stock hit a new all-time high at Rs 1,028 amid a sharp rally in public sector undertaking (PSU) stocks

The LIC stock hit a new all-time high at Rs 1,028 on Monday amid a sharp rally in public sector undertaking (PSU) stocks.

Shares of Life Insurance Corporation of India (LIC) for the first time ever crossed the Rs 1,000 mark, as they rallied 6 per cent on the National Stock Exchange (NSE) in Monday's intra-day trade amid a sharp rally seen in public sector undertaking (PSU) stocks.

The stock finally settled 5.6 per cent higher at Rs 998.85 on the NSE. It closed 6 per cent higher at Rs 1,000.35 on the BSE. In comparison, the S&P BSE Sensex ended down 0.5 per cent at 71,731.

LIC on Monday after market hours informed that the board of directors of the corporation may consider a proposal for declaration of interim dividend for the financial year 2023-24 in the forthcoming board meeting.

The board of LIC is scheduled to meet on February 8, 2024, to consider and approve the unaudited financial results for the quarter and nine-month period ended on December 31, 2023.

Currently, the stock is trading 11 per cent higher against its issue price of Rs 904 per share allotted to retail investors and employees. 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.

Meanwhile, in the past three months, the market price of LIC has zoomed 65 per cent, as compared to 11 per cent gain in the S&P BSE Sensex. The stock has zoomed 89 per cent from its 52-week low of Rs 530.20 touched on March 29, 2023.

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.

LIC is India's leading statutory insurance and investment corporation with assets under management (AUM) of Rs 47.43 trillion as on September 30, 2023 and investments in more than 270 listed companies. The company continues to diversify its product mix with a focus on enhancing the non-par share of products.

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

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.

Meanwhile, in the past one month, the S&P BSE PSU index has surged 15 per cent and zoomed 60 per cent in the past six months. In comparison, the benchmark index was up 0.53 per cent and 8.7 per cent, respectively. Share price of LIC has appreciated by 21 per cent and 52 per cent, respectively, during the same period.

In past six trading days, LIC has rallied 11 per cent the Reserve Bank of India (RBI) vide their letter dated January 25, 2024, gave its approval to the Corporation to acquire aggregate holding of up to 9.99 per cent of the share capital or voting rights in HDFC Bank. The approval is granted pursuant to application made by LIC to RBI on November 30, 2023. At the end of December 2023 quarter, LIC held 5.19 per cent stake in HDFC Bank, shareholding pattern data shows.

Last month, LIC had 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.