LIC shares jump 73% from 52-wk lows; stock surpasses issue price for retail investors

Shares of Life Insurance Corporation of India Ltd (LIC) surged more than 3 per cent during the trading session on Wednesday to hit a new 52-week high. The state-run insurance behemoth became the most valued PSU entity, surpassing the market capitalization of State Bank of India Ltd (SBI).

Life Insurance Corporation shares rose over 3 per cent to Rs 919.45 on Wednesday, against the previous close at Rs 892.50 on Tuesday. The stock has surged about 15 per cent in the last one month, while it is up 50 per cent in the last six months period. The stock is up about 75 per cent from its 52-week low at Rs 530.

The insurance major topped the issue price for retail, policyholders and employee investors, who were given a discount of Rs 45 per cent over the issue price of Rs 949 for the first time since its listing in May 2022. The effective issue price for these investors came out to be 904 apiece.

In terms of market capitalization, LIC topped Rs 5.8 lakh crore mark on Wednesday at the price of Rs 919.45, race-pasting State Bank of India's total valuation of Rs 5.67 lakh crore for the day. However, both the stocks gave up their gains amid the selloff but LIC was able to maintain the edge over SBI.

Shares of LIC topped its listing price of Rs 869 apiece on Tuesday, marking its way in the top-10 most valued companies in the Indian stock market. LIC is the largest domestic institutional investor in India with more than 260 companies where it owns more than 1 per cent stake. The company has reaped profit of about Rs 80,000 crore in the last two months.

In December 2023, LIC Chairman Siddhartha Mohanty told news agency PTI that he is optimistic about achieving double-digit growth in new business premiums in the financial year 2024. Also, LIC has a limited free float as about 97 per cent stake of the company is owned by the government of India.

Analysts continue to remain positive on the stock. Gaurang Shah from Geojit Financial Services, in an interaction with Business Today TV, said to prefer life insurance basket as a whole and LIC is one of its top picks since the IPO. He said to be institutionally positive on the counter.

"Our sense is that it would be prudent to hold the stock from a medium-to-long term perspective due to the company’s leading position in the life insurance space, attractive valuation and favourable tailwinds such as rising domestic savings and increasing awareness and acceptance of life insurance," he added.

LIC shares have been in uptrend after giving breakout at Rs 750-levels, said Ganesh Dongre, Senior Manager - Technical Research, Anand Rathi Shares and Stock Brokers."Current uptrend may further continue if the stock closes above Rs 950 levels and can make further rally towards 1050 level. "We recommend buy on dips in this stock with the stop loss of Rs 840," he said.

Multiple reasons can be attributed to the recent run-up in LIC share price including strong response to LIC’s Jeevan Utsav plan along with a generally improved market sentiment towards PSU stocks, said Shreyansh Shah, Research Analyst, StoxBox. The recent upbeat stock market performance, especially Adani Group companies, can also be attributed to the recent gains, he said.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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