LIC surpasses SBI as India's most valuable PSU; market cap hits Rs 5.8 lakh crore

LIC overtakes SBI: The Life Insurance Corporation of India (LIC) has emerged as India's most valuable Public Sector Undertaking (PSU), surpassing the State Bank of India (SBI). The market capitalisation of LIC has soared to Rs 5.8 lakh crore, overtaking SBI's market cap, as the insurance giant's share price surged by over 2 per cent during morning trades on Wednesday, reaching a 52-week high of Rs 919.45.

Remarkable share price surge

The bullish momentum in LIC's share price has been notable, marking close to 50 per cent gain since the beginning of November. After experiencing downward pressure post-listing until March 2023, with an all-time low of Rs 530, LIC witnessed a remarkable turnaround. The stock gained 12.83 per cent in November and a robust 22.66 per cent in December, further strengthening its positive trend in the early days of 2024 with an additional 10 per cent gain.

Analysts had expressed confidence in LIC's potential, with Centrum Broking highlighting the company's trading at a discount to its embedded value, providing significant value comfort. The regulatory changes in the participating (PAR) and non-participating (non-PAR) business were expected to enhance LIC's profitability in the long run.

LIC's strong financial performance in the first half of FY24 reflected a net profit of Rs 17,469 crore, compared to Rs 16,635 crore in the same period a year ago. The new business premium for H1FY24 increased by 2.65 per cent to Rs 25,184 crore, demonstrating the insurer's continued dominance and growth in the market.

The surge in LIC's shares has also led the company to achieve a milestone by crossing its listing day price of Rs 904 for the first time. The stock reached an intraday high of Rs 919.45, showcasing an 11 per cent rise in the past month and an impressive 43 per cent increase over the last six months. Chairman Siddhartha Mohanty's optimism about achieving double-digit growth in new business premiums for the financial year 2024 contributed to the surge in LIC's shares.

Despite the remarkable performance, it's essential to note that LIC operates with a relatively low float in the market, as the government retains a substantial 96 per cent stake in the company. The government's divestment during the IPO in May 2022, the country's largest public issue to date, was limited to a 3.5 per cent stake.