In a notable turn of events, Life Insurance Corporation of India Ltd. (LIC) saw its shares surpass the retail IPO price of ₹904, reaching an intraday high of ₹918.45 on Wednesday, January 17. This milestone marks a significant moment for India's largest insurer, reflecting an 11% rise in the past month and an impressive 43% increase over the last six months.
"Also in keeping with market forecasts, LIC's success during the previous two quarters"
Chairman Siddhartha Mohanty's optimism about achieving double-digit growth in new business premiums for the financial year 2024 played a pivotal role in boosting LIC shares. The surge continued as LIC surpassed the market capitalization of State Bank of India, becoming India's most valuable PSU with a current market cap of ₹5.75 lakh crore.
It's essential to note that LIC operates with a low float in the market, with the government still holding a substantial 96% stake. Despite the government's divestment of only 3.5% during its IPO in May 2022, LIC's stock has not revisited its retail IPO price of ₹904 or the original IPO price of ₹949 since listing.
Market experts share varying perspectives on LIC's future. Deepak Shenoy of CapitalMind envisions LIC becoming one of India's top eight most profitable companies within the next two years. Meanwhile, brokerage firm Kotak Institutional Equities highlights the hype surrounding LIC's non-par product Jeevan Utsav, deeming LIC's valuation as "inexpensive" and maintaining a "buy" recommendation with a price target of ₹1,040.
Gaurav Bissa of InCred Equities observes a positive shift in LIC's trend, noting higher highs and higher lows. The stock's recent swing breakout above ₹750 positions it for potential growth towards ₹1,100, with the next hurdle at ₹920.
As of now, LIC shares are trading at ₹908.30, marking a 1.8% increase. Investors are closely watching the developments, considering LIC's strategic position and potential for further valuation. The journey ahead for LIC is anticipated to be dynamic, with market dynamics and company performance influencing investor decisions.