LIC gains 5% to cross listing price for first time
The stocks of LIC soared nearly 5% to a 52-week high of Rs. 900 on Tuesday, surpassing the listing price of Rs. 867 for the first time since debut on May 17, 2022. India's largest insurer has seen its shares rise 11% over the past month and over 43% during the last six months. LIC's market cap now stands at Rs. 5.59 lakh crore, inching closer to India's largest lender SBI, which has an m-cap of Rs. 5.72 lakh crore.
Government has about 96% stake in LIC
Although the market cap of LIC is growing comparable with that of SBI, other parametres indicate that SBI is still ahead. The biggest constrast between the two PSUs is in terms of government's shares. The government holds about 96% of the stocks in the LIC while its shares in SBI stand at 57.5%. Overwhelming ownership by the government indicates that the market cap of LIC is not sufficiently determined by the market dynamic.
Why LIC shares are on the rise
The biggest reason behind LIC's success at the stock market is its position in the insurance market. It is a market leader and holds a share of 58.5%. More recently, the company announced plans to achieve double-digit growth in new business premiums in FY24. New business premium is the amount paid by the policyholder in the first year of a life insurance contract or a single lump sum payment.
