Reasons why the price of LIC shares is going up

share market

Experts say that proposed regulatory changes, business performance, and a head honcho from the private sector are all reasons why LIC shares are going up on the market. Experts say that the Life Insurance Corporation of India’s (LIC) shares are going up on the market because of a mix of proposed regulatory changes, business performance, a CEO from the private sector, higher profit booking, and the issue of bonus shares.

The LIC scrip started trading on Wednesday at Rs 723, and during the day it went as high as Rs 732 and as low as Rs 719.95.

The highest and lowest prices for the scrip in the last 52 weeks were Rs 920 and Rs 588, respectively.

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A composite insurer is one that can sell both life and general insurance policies.

“The government’s plan to give a composite insurance license, news that the government wants to hire someone from the private sector to run LIC, and old news of higher profit booking leading to the hope of higher dividends or the issue of bonus shares could be the reason for scrip going up,” an industry expert told IANS on condition of anonymity.

Aside from that, the life insurance giant is also growing its business. The proposed changes to regulations by the sectoral regulator would also help LIC, which could also be a reason, another industry expert told IANS on condition of anonymity.

Due to a change in the accounting policy, LIC’s Q2FY23 profit went from Rs 14,271.80 crore to Rs 15,952.29 crore.

According to the new policy, the amount related to the increase in the available solvency margin from non-participating policies will go to the shareholders’ account. As a result, the net profit for Q2FY23 went up by that amount.

People say that LIC is planning to move a huge amount of money from the funds of non-participating policyholders to the funds of shareholders.

But the price on the market right now, which is about Rs.724, is nowhere near its initial public offering (IPO) price of Rs. 949 this year.

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