LIC becomes most valued PSU with Rs. 5.64L crore m-cap
Life Insurance Corporation of India (LIC) has once again become the most valuable listed public sector company, overtaking State Bank of India (SBI) in market capitalization. Currently, LIC's market cap is at Rs. 5.64 lakh crore, while SBI's stands at Rs. 5.63 lakh crore. Today, LIC's stock price increased by 0.2% to Rs. 896 on the BSE, while SBI's stock fell by 1.5% to Rs. 624. In July 2022, SBI had surpassed LIC in terms of market capitalization.
LIC's growth driven by upcoming product launches
In 2023, LIC's value grew by over 22%. So far in 2024, the stock has risen by 7.5%. In comparison, SBI gained nearly 5% last year but has lost over 1% this year. To achieve double-digit growth in new business premium this fiscal year, LIC plans to introduce three to four new products in the coming months. LIC Chairman Siddhartha Mohanty expressed confidence in reaching this goal, citing an increase in individual retail business.
Kotak maintains buy ratings on both LIC and SBI
Kotak Institutional Equities maintains a 'buy' rating on LIC, with a price target of Rs. 1,040, due to its attractive valuations. Kotak also raised SBI's target price to Rs. 760, keeping a 'buy' rating, and suggested owning SBI over other PSU banks because of its superior performance in credit cost, liability and asset franchises, as well as technological advancements.
SBI's advantage against LIC
Despite LIC's success at the stock market and its apex position in the insurance market, SBI has some advantages over LIC. The government holds about 96% of the stocks in the LIC while its shares in SBI stand at 57.5%. Excessive government ownership in LIC inspires less confidence as compared to SBI whose stock price fluctuations are more organic and in sync with the market conditions.
