On Wednesday, January 17th Life Insurance Corporation of India (LIC) surpassed State Bank of India (SBI) in market capitalization, becoming the most valued PSU stock in India. This shift in status occurred after LIC experienced a 9% stock rally over the past week.
Setting a new milestone on January 17th, LIC achieved a record-breaking moment in the stock market as its share price reached Rs 900, pushing its market value above the Rs 5.75 lakh crore mark for the first time. This achievement comes after LIC hit a 52-week high following a notable spike in share prices, allowing it to surpass the State Bank of India (SBI), the largest government sector bank in India.
May 17, 2022: LIC shares made their debut on the stock market at ₹875.25 each, slightly below the pre-listing issue price of ₹949. Subsequently, the shares of the insurance giant experienced a downward trend, reaching an all-time low of ₹530.
November 2023: LIC shares experienced a substantial surge of more than 12 percent, marking a recovery in their performance. This positive momentum persisted as LIC shares recorded a gain of 22.52 percent in December and a further spike of 7.51 percent in the initial two weeks of January 2024.
The most significant Initial Public Offering (IPO) in India to date occurred in May 2022 when the government divested a 3.5% stake in LIC, amounting to a value of Rs 21,000 crore.
Last month, the PSU received an exemption from adhering to the minimum public shareholding norms until 2023. This has diminished the likelihood of a government offer for sale (OFS), contributing to the ongoing rally in the stock.
LIC has consistently been a top choice for analysts, with Centrum Broking stating in early January that the company is trading at a discount to its Embedded Value, providing substantial comfort in terms of value. Despite its substantial size, LIC remains a dominant player, evident from its increasing market share as indicated by Q1 results. Regulatory adjustments related to the PAR and non-PAR business are anticipated to have a substantial positive impact on LIC's long-term profitability.
