LIC flop show continues; shares hit fresh all-time low

Shares of insurance behemoth Life Insurance Corporation of India (LIC) opened a gap-down and touched a new all-time low today after the company announced its shareholding in state-owned refiner and oil marketing major Bharat Petroleum Corporation Ltd has increased by over 2% from 7.030% to 9.041% from December 28, 2021, to September 9, 2022. LIC also conducted its first annual general meeting (AGM) on Tuesday.

LIC in an exchange filing says: "The Corporation’s shareholding in 'Bharat Petroleum Corporation Limited' has Increased from 15,25,08,269 to 19,61,16,164 Equity Shares Increasing its shareholding from 7.030% to 9.041% of the paid-up capital of the said company."

The LIC stock, which is facing downward pressure since its listing in May 2022, opened at ₹627 today but soon fell to an intra-day and 52-week low of ₹624. At the time of filing the report, the LIC shares were trading at ₹625.45, down 0.57% from the previous trading session.

LIC's current market cap stands at ₹3.9 lakh crore, a huge fall from ₹6 lakh crore on its listing day. Despite the government's push, LIC turned out to be one of the worst-performing initial public offerings (IPO) of this year, eroding investors’ wealth by around ₹2.1 lakh crore so far.

At the time of listing, LIC was the 5th biggest listed firm in terms of market capitalisation after Reliance Industries, Tata Consultancy Services (TCS), HDFC Bank, and Infosys. With a sustained selling in its shares by investors, LIC has now slipped to 14th position, with the likes of Hindustan Unilever Ltd (HUL), SBI, Bharti Airtel, ICICI Bank, Adani Transmission, ITC, Bajaj Finance, HDFC, Adani Enterprises surpassing its market cap.

LIC’s shares have fallen 4.65% in a week and 6.6% in the past month. On a year-to-date (YTD) basis, it delivered a negative return of 28.53% to its shareholders. The stock hit a 52-week high of ₹920 on its listing day, i.e. May 17, 2022.

For the April-June quarter of 2022 (Q1 FY23), LIC’s profit was ₹682.89 crore, compared to ₹2.94 crore in the Covid-disrupted last year’s June quarter. On a sequential basis, LIC’s profit dropped from ₹2,371 crore in the March quarter of 2022. The total income stood at ₹1,68,881 crore in Q1 FY23 vs ₹1,54,153 crore in the year-ago period and ₹2,11,451 crore in Q4 FY22.

India is ranked 11th in the global insurance business, as per a Swiss-re Sigma report. The country’s share in the global insurance market was 1.72% in 2020. In the global life insurance market, the share was 2.90% during the same period. In India, the share of the life insurance business in the total insurance premium was high at 75.24% in 2020, while it was 24.76% in the non-life insurance business. The total insurance penetration in India increased from 3.76% in 2019-20 to 4.20% in 2020-21, a growth of 11.70%.