LIC shares experienced a sustained decline, deviating from their usual performance and depreciating by 26% by November of the preceding year. On January 30, Life Insurance Corporation of India (LIC) reached a significant milestone by exceeding its issue price for the first time. This uptick followed the central bank’s approval for LIC to raise its stake in HDFC Bank.
The LIC issue price ranged from Rs 902 to Rs 949 per share. The initial public offering (IPO) was launched in May 2022 and was listed on the National Stock Exchange at a discount to the issue price of Rs 867. LIC shares experienced a downtrend after listing, falling by 26% from the time of listing and November of the prior year. But after November, there was a notable turnaround, with LIC shares showing an incredible 55 percent gain in just two months.
LIC shares cross the issue price level for the first time; stock jumps 4%.
HDFC Bank reported that the central bank has granted LIC permission to acquire a 9.99 percent stake in the bank by January 24, 2025. As of Q3FY24, LIC already holds 34 crore HDFC Bank shares, equivalent to a 5.19 percent stake. With the recent approval, LIC has the opportunity to acquire an additional 4.8 percent stake in HDFC Bank. Market experts suggest that LIC’s plan to acquire an additional 4.8 percent stake comes at a favorable moment, coinciding with the lender’s stock becoming attractive after a significant decline. In Q2FY24, LIC’s net profit decreased by 50% year over year to Rs 7,925 crore. In the same period last year, it declared a net profit of Rs 15,952 crore. The decrease in profit statistics was caused by a change in accounting rules regarding the transfer of money (Net of Tax) in September 2022, which made YoY profit figures incomparable.
At 1:45 pm, LIC shares were up 2.89 percent on the National Stock Exchange, trading at Rs 942.05.
