LIC Becomes India's Most Valuable State-Owned Company; Shares Up 40% In 3 Months

Shares of Life Insurance Corporation of India (LIC) which overtook State Bank of India (SBI) on Wednesday to become India's most valuable state-owned company in terms of market capitalisation traded at a new 52 Week High value of 919.45 in the intraday trading on Wednesday (January 17). The share price of Life Insurance Corporation of India gained 2.02% at Rs 910.55 at 10:22 am IST today. LIC shares traded at a new 52-week high value of 900.00 on Tuesday (January 16, 2024).

At the time of writing this article, LIC had a market capitalization of Rs 5,73,044.79 crore, higher than SBI's market cap of Rs 5,62,295.17 crore. The share price of SBI was down 1.06% at Rs 630.05 per share at 10:33 am IST today.
Despite becoming India's most valued company, LIC has eroded investor's wealth. LIC shares made a market debut at a discount in May 2022. The stock crossed the listing day price of Rs 867.2 per share on Tuesday, almost two years after listing. However, the company's shares are still below the retail share allotment price of Rs 904 and the original IPO price of Rs 949.

The surge in LIC shares can be traced back to November and December of the preceding year when in an interview with news agency PTI, LIC Chairman Siddhartha Mohanty expressed optimism about achieving double-digit growth in new business premiums for the financial year 2024. At that time, Mohanty stated that the insurance giant intends to achieve this growth by launching some new attractive products.

This positive outlook boosted investors' sentiments triggering a 12% surge in November and an additional 22% surge in December.

Last year, the life insurer informed that the Corporation's shareholding in "Engineers India Ltd." has decreased from 2,89,70,343 to 1,75,46,621 Equity Shares, decreasing its shareholding from 5.155% to 3.122% of the paid-up capital of the said Company.

Engineers India Ltd (Ell) is a leading global engineering consultancy and EPC company owned by the Govt. Of India operating under the control of the Ministry of Petroleum and Natural Gas (MoPNG).

New business premium (NBP) has played a critical role in LIC's success. NBP represents the premium due on policies in the first one year of a life insurance contract or a single lump sum payment from policyholders. The company's consistent focus on expanding its NBP has been a driving force behind its recent stock performance.

LIC stock price performance:

LIC shares have gained almost 40% in the last three months. In the last six months, LIC shares have gained 45.67%. Returns from LIC share price in last one year have gained 28.21%. The stock has a 52 Wk High and 52 Wk low of Rs 919.45 and 530.20 respectively.