Life Insurance Corporation of India, a government-owned insurance giant, has regained its status as the most valued public sector undertaking, surpassing the market capitalization of State Bank of India.
While SBI holds a market value of Rs 5.63 lakh crore, LIC has surpassed it with a market capitalization (MCap) of Rs 5.64 lakh crore. As of 9:30 am, the SBI stock witnessed a 1.5 percent decline to Rs 624, whereas LIC traded at Rs 896 on the BSE, showing a 0.2 percent increase. Concurrently, the benchmark BSE Sensex experienced a 1.02 percent loss, settling at 72,386 points.
In 2023, LIC witnessed a remarkable gain of over 22%, and in the ongoing year, 2024, it has surged by an additional 7.5%. In contrast, SBI made modest progress with an advancement of nearly 5% in the previous year, but in the current year, it has incurred a loss of over 1%.
This favorable trend gained additional momentum in the subsequent month, recording an impressive gain of 22.66% in December. In the ongoing month and since the commencement of 2024, the stock has continued to exhibit robust performance, marking a gain of over 10% thus far. Currently, the stock is approximately 4% below its IPO price.
LIC has consistently remained a top choice among analysts. At the beginning of January, Centrum Broking highlighted that LIC is trading at a discount to its Embedded Value, providing substantial value comfort.
LIC continues to maintain its dominance, evident from its Q1 results, showcasing a consistent increase in market share despite its substantial size. Anticipated regulatory changes in the PAR and Non-PAR business segments are expected to contribute significantly to LIC’s long-term profitability.
The PAR, or participating life insurance plan, allows the life assured to partake in the profits of the life insurance company. Analysts contend that the non-par segment is value-adding, and an expansion in its share has the potential to enhance LIC’s overall margins.
In terms of the first half of FY24 financial performance, LIC reported a net profit of ₹17,469 crore, reflecting growth from ₹16,635 crore in the corresponding period of the previous year. Additionally, the new business premium (individual) for H1FY24 surged by 2.65% to ₹25,184 crore from ₹24,535 in H1FY23. The new business premium represents the premium due in the initial policy year of a life insurance contract.