Shares of Life Insurance Corporation of India for the first time crossed the listing price on Tuesday, though it is still ruling below the allotted price for retail investors. After hitting an all-time high of ₹900 since listing, the stock on Tuesday closed at  ₹892.50.

While LIC allotted shares to retail investors and employees at ₹904 in the IPO, high net worth individuals and institutions, the price was ₹949. However, policyholders can heave a sigh relief as nearly one-and-half year of listing, the stock closed above their allotment price of ₹889.

However, the stock bounced back 68 per cent from its all-time high low price of ₹530 touched in March 2023.

LIC market-cap

Besides, shares of the insurance major, are on the verge of toppling State Bank of India as the most valuable PSU company in terms of market cap. LIC commands a market share of ₹5.64-lakh crore against SBI’s ₹5.68-lakh crore.

According to analysts, LIC turned attractive due to a slew of factors that included compelling valuation, bullish sentiment towards public sector stocks, strong embedded value (EV) growth led by buoyant equity markets and possibility of step up in dividend.

Despite recent run-up, the relatively attractive valuation (FY25 P/EV: 0.7x) and hope of revival in growth (FY25 Annual premium equivalent (APE) growth: 10 per cent) remain supportive of the stock performance, said Emkay Global Financial, which hiked the target price to ₹975 (from ₹850 earlier), in a recent report.

ULJK Research, which is the most bullish with an aggressive price target of ₹1,126, said LIC’s future prospects are bolstered by several factors, including its strong brand reputation, dominant market position, strategic introduction of new products tailored to customer and channel preferences, extensive distribution network, ongoing digital transformation efforts, and a steadfast focus on high-margin VNB (value of new business) products.

Exodus of retail investors

Meanwhile, retail investors continue to exit from the insurance behemoth. During the last quarter, when the stock price jumped, nearly 1.95 lakh retail investors quit the company. At the end of December, number of retail investors dropped to 28.66 lakh from 30.61 lakh investors at end of September 2023. Their holding dropped from 1.99 per cent to 1.83 per cent.

Since listing 11.22 lakh retail investors exited from LIC as the stock is yet to reach their investment price.

While MF’s stake in LIC improved marginally to 0.79 per cent (0.59 per cent) during the quarter, the FPI’s holding dropped to 0.06 per cent (0.10 per cent).