LIC Share Price: In the same year, in May 2022, the stock of LIC was listed on the stock exchange. But since then LIC’s stock is trading well below its IPO price. Of all the life insurance companies listed in the stock market, only LIC is trading below its IPO price. The reason is its declining stake in the insurance sector. Private insurance companies are constantly making a dent in the market share of LIC. The government is the largest stakeholder in LIC. This has also increased the concern of the government. Therefore, in order to make more profit, the government has asked LIC to change its product strategy so that the company can achieve its full potential and give better returns to the investors.
During the review of the company’s performance, the Ministry of Finance is sensitizing the LIC management about the steps, which can prove to be helpful in increasing the capital of the investors. With the listing on the stock exchange, the process of modernization of the more than 65 year old institution has started. According to an official, we are working with the management to modernize their product offerings and pay less dividend to the policyholders.
In non-participating insurance products, insurance companies are not required to share their profits in the form of dividends to policyholders. On the other hand, in partnership products, insurance companies have to pay dividends to the policyholders. LIC’s net profit in the first quarter of 2022-23 was Rs 682.88 crore.
LIC’s IPO came in May 2022, from which the government received Rs 21,000 crore. The stock was listed in the stock market on 17 May. The IPO was launched at the price level of Rs 949. But now the stock is trading at Rs 595.50. That is, the stock has fallen 37 percent since the listing.
However, many foreign brokerage companies are bullish on the stock of LIC. Brokerage companies have set the company’s stock target very high for the next year. Citi in a report dated October 14 has set a target of Rs 1,000 for LIC’s stock. The report said that LIC is in a better position than “mature global companies”.
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