The Securities and Exchange Board of India (Sebi) has granted Life Insurance Corporation (LIC) of India an extension until 2027 to achieve a 10% public shareholding, according to a recent announcement.
The Economic Times has reported that this extension, up from a previous requirement, provides LIC additional time to expand its public shareholding, which currently stands at only 3.5%.
LIC was initially granted a one-time waiver to meet a 25% public shareholding quota by 2032, 10 years post its IPO in May 2022. In its initial public offering, the government divested a 3.5% stake in LIC through an offer for sale (OFS), raising ₹21,000 crore.
Post-listing, LIC experienced fluctuations in its share price, initially trading at more than an 8% discount to its issue price. Nevertheless, the stock has since rebounded, now trading above its opening price of ₹949.
Following the announcement of the new deadline, LIC’s stock value increased by 6.31% to ₹989 on the Bombay Stock Exchange (BSE), while the Sensex recorded a marginal decline of 0.16%.
Recent shifts in LIC’s strategic approach to its product offerings, focusing more on non-participatory products, have led analysts to adjust their price targets for LIC shares upwards to over ₹1,300, citing improved prospects for Value of New Business (VNB) margins.
The move from a predominantly participatory product mix to a more balanced offering aims to boost LIC’s VNB margins significantly.
The announcement of the extension follows the launch of LIC’s new endowment insurance plan, which targets parents seeking to secure their children’s future educational and financial needs.
A non-linked, non-participating plan, Amritbaal is an individual savings life insurance solution that aims to build a substantial fund to support children’s educational expenses and other financial needs. It ensures fixed benefits upon the death or survival of the policyholder, without the potential for discretionary bonuses or a share in surplus profits.
