Shares of Life Insurance Corporation of India Ltd. (LIC) crossed its listing day price of ₹867.2 for the first time on Tuesday, making an intraday high of ₹895. No only did the stock cross its listing-day price, but also the price at which shares were allotted to policyholders.
New business premium (NBP) is the premium, which is due on policy in the first year of a life insurance contract or a single lump sum payment from the policyholder.
One must note though, LIC operates on a very low float in the market as the government still holds 96% stake in the company. The government had divested only 3.5% stake at the time of its IPO in May 2022, which is till date, the country’s largest public issue.
Since listing, the stock has not re-tested either its retail IPO price of ₹904, or the original IPO price of ₹949. Retail shareholders and LIC policyholders were given a discount of ₹45 per share and ₹60 per share respectively. Policyholders were given shares at ₹889 per share.
“LIC is going to be among the top eight most profitable companies in India in the next 2 years and it’s a business that is worth keeping for a longer time and it will get revalue as more information starts to be available,” Deepak Shenoy of CapitalMind told CNBC-TV18 on December 18.
Back then, the brokerage had called the valuation of LIC “inexpensive,” thereby providing big headroom. Therefore, it retained its “buy” recommendation on the stock with a price target of ₹1,040.
“LIC started its journey on a very weak note with about 40% correction since its listing. However, over the last few months it managed to change its downtrend after formation of higher highs and higher lows. It witnessed a swing breakout above ₹750 levels which propelled the stock towards ₹900 levels. The next hurdle is placed at 920 which once crossed and sustained can push the stock towards ₹1,100 levels,” Gaurav Bissa of InCred Equities said.
Shares of LIC are trading 3.8% higher at ₹887.30.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.