Life Insurance Corporation of India (LIC) has reclaimed its position as the most valuable listed public sector company, surpassing the market capitalization of State Bank of India (SBI). As of now, LIC’s market cap stands at Rs. 5.64 lakh crore, edging past SBI’s Rs. 5.63 lakh crore.
Market Performance
Today, LIC’s stock witnessed a 0.2% increase, reaching Rs. 896 on the BSE. In contrast, SBI experienced a 1.5% decline in its stock value, settling at Rs. 624. It is noteworthy that in July 2022, SBI had previously exceeded LIC in market capitalization.
Financial Growth
LIC exhibited substantial growth in 2023, registering an increase of over 22%. In the current year, the stock has already risen by 7.5%. In contrast, SBI witnessed a nearly 5% growth last year but has faced a decline of over 1% in the ongoing year.
Business Expansion Strategies
To achieve double-digit growth in new business premium for the fiscal year, LIC has outlined plans to introduce three to four new products in the upcoming months. LIC Chairman Siddhartha Mohanty is optimistic about meeting this target, emphasizing the rise in individual retail business.
Market Analyst Perspective
Kotak Institutional Equities maintains a ‘buy’ rating on LIC, setting a price target of Rs. 1,040, highlighting its attractive valuations. The target price for SBI has been raised to Rs. 760, retaining a ‘buy’ rating. Kotak suggests preferring SBI over other PSU banks due to its superior performance in credit cost, liability and asset franchises, and technological advancements.
Ownership Structure and Confidence Factors
While LIC dominates the stock market and holds a prime position in the insurance sector, SBI maintains certain advantages. The government possesses around 96% of LIC stocks, raising concerns about excessive government ownership. In comparison, the government’s share in SBI is at 57.5%. SBI’s stock price fluctuations are viewed as more organic and aligned with market conditions, instilling greater confidence compared to LIC.