LIC Share Price Gains 1% To Inch Closer To IPO Price: Here's What Analysts Think You Should Do

State-run insurance giant Life Insurance Corporation of India’s (LIC) stock briefly reached and exceeded its IPO issue price on Wednesday.

What Happened: The public sector firm gained up to 2.4% to cross the lower band of its IPO issue price of ₹904 per share, which included a discount of ₹45 per share for retail traders.

The insurer has also regained its status as the most valued listed public sector undertaking, surpassing the market capitalization of State Bank of India (SBI). SBI has a market value of ₹5.63 lakh crore, while LIC has taken the lead with a market capitalisation of ₹5.64 lakh crore.

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LIC, which listed in May 2022, disappointed investors as shares dropped sharply on debut, saw a growth of over 22% in 2023 and a 7.5% jump so far in 2024. In comparison, SBI advanced nearly 5% last year and has lost over 1% so far this year.

LIC recently announced plans to launch three to four products in the coming months to achieve double-digit growth in new business premiums this fiscal year. Chairman Siddhartha Mohanty expressed confidence in reaching this target, citing an uptick in individual retail business.

The Analyst Viewpoint: The state-run insurer also introduced a special scheme, Jeevan Utsav, on November 29, contributing to the recent surge in the stock, attributed to the buzz around this non-par product, according to Kotak Institutional Equities.

Kotak Institutional Equities believes that LIC’s marketing force is capable of promoting non-par policies, and the success of this product is anticipated to be determined over the next four months. The brokerage maintains a “buy” rating on LIC, citing inexpensive valuations, and gives it a price target of ₹1,040.

Price Action: LIC’s stock was up 1.05% at ₹901.95 around noon on Wednesday, hitting a record high.

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