Tag: LIC

LIC’s investments in Adani Group firms soar notching sharp 70% gain in FY24

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Life Insurance Corporation of India (LIC) has seen a staggering 70% surge in its investments in seven Adani Group companies. At the end of FY23, LIC’s investments in Adani Group firms stood at ₹36,089 crore, which has now surged to ₹61,657 crore.

Among the various Adani Group firms in which LIC holds stakes, the most significant appreciation in value occurred in Adani Green and Adani Ports during FY24. Adani Green witnessed an impressive 114% surge, with LIC’s investments rising from ₹1,892 crore at FY23’s end to ₹4,045 crore presently.

Likewise, LIC’s investments in Adani Ports surged 113%, growing from ₹10,727 crore at FY23’s end to ₹22,819 crore today, reflecting a substantial appreciation.

Adani Group companies like Adani Enterprises enhanced the value of LIC’s investment by 83%, while Ambuja Cement gave a 67% return. Adani Group cement major ACC enhanced the value of investments by 48% in FY24. However, the lowest appreciation in LIC’s investments came in companies like Adani Total and Adani Energy with 9% and 8% returns, respectively.

Last year, the investment by India’s insurance behemoth in the Adani Group firms came under intense scrutiny amid a sharp fall in the Gautam Adani-promoted group’s share prices after the release of the Hindenburg Report.

An assessment of how the value of LIC’s investments in Adani Group companies has fared since hitting the lows following the release of the Hindenburg report reveals interesting trends.

The value of LIC’s investments in Adani Group companies has more than doubled since then, surging from ₹29,024 crore on February 27, 2023, to ₹61,657 crore today. Most notably, LIC investments in Adani Green, Adani Enterprises, and Adani Ports have seen increases of 308%, 169%, and 139% respectively.

In Adani Green, the value of LIC’s investment dropped to ₹992 crore but has now risen to ₹4,045 crore. Similarly, for Adani Enterprises, LIC’s investment value fell to ₹5,345 crore but has now climbed up to ₹14,374 crore. Similarly, for Adani Ports, the value of LIC’s investments moved from ₹9,541 crore on February 27, 2023 to ₹22,819 crore today.

With the significant gains witnessed in LIC’s value of investments in Adani Group companies, this value is just about 20% below its pre-Hindenburg incident levels. The value of investments made by LIC in these seven Adani Group companies was ₹77,881 crore on December 31, 2022. The investment value of LIC in stocks such as Adani Ports, Ambuja Cement and ACC has already surpassed its December 2022 levels.

It is pertinent to note that LIC trimmed its stake in some of these Adani Group companies in FY24. LIC trimmed its stake by 1.26% in Adani Ports, 0.33% in Adani Enterprises and 0.61% in Ambuja Cement in FY24.

Also Read: LIC’s investment in Adani Group firms: Top 6 things to know

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

LIC shares down 22% from their peak, slip below IPO price; What lies ahead?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Life Insurance Corporation of India (LIC) fell 2.5% to hit a day’s low of ₹902.50 on Monday, March 18, after witnessing selling pressure for the fifth consecutive session. The scrip opened at ₹916.50 and plunged 1.5%. In the last fivesessions, the insurance player’s stock has tanked about 10%.

The stock of India’s largest insurer fell on plans to raise wages by around 17% for its 1.10 lakh employees. The hike is set to substantially impact LIC, with an estimated annual implication of over ₹4,000 crore. Once the increments are implemented, LIC’s annual wage bill will swell to over ₹29,000 crore.

In the current financial year, however, inclusive of arrears, the financial implications for the corporation will be higher at ₹7,000 crore—taking FY24’s total wage bill to ₹32,000 crore.

The National Pension System (NPS) contribution is enhanced from 10% to 14% for nearly 24,000 employees who joined after April 1, 2010, the state-run insurer said. Additionally, a one-time ex-gratia payment to LIC pensioners was also made to more than 30,000 pensioners and family pensioners, it said.

With today’s losses, the stock is trading 22% below its all-time high level of ₹1,175, hit on February 9, 2024.

India’s largest insurer has seen shares rise 6% so far in 2024 and nearly 60% during the last one year. The stock has also risen 76% from its 52-week low of ₹530.

The stock crossed its listing day price of ₹904 for the first time on January 17, 2024. LIC shares jumped 12% in November 2023 and 22% in December 2023 after Chairman Siddhartha Mohanty told news agency PTI that he is optimistic about achieving double-digit growth in new business premiums in the financial year 2024.

LIC is also India’s largest IPO where the government had divested 3.5% stake in the company for over ₹21,000 crore. Therefore, one must also note that the stock trades on very low float, as the government still owns the remaining 96.5% stake. As a result, any significant move on either side will be extreme.

Out of the 19 analysts tracking LIC, 12 have a ‘Buy’ recommendation on the stock, five say ‘Hold’, while two have a ‘Sell’ rating. JP Morgan has the highest price target for LIC at ₹1,340, followed by Kotak Securities and Axis Capital at ₹1,300 per share.

Shares of LIC are trading 1.68% lower at ₹909.65 during today’s afternoon trade. The stock is trading 4% below its IPO price of ₹949.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Early Holi for LIC employees as govt approves 17% salary hike effective from August 2022

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Centre has cleared a 17% overall hike in salaries for 1.10 lakh employees of the Life Insurance Corporation of India (LIC), bringing an early Holi celebration, the festival of colours. Coming days after the government cleared a similar raise for the employees of public sector banks, the salary revision for LIC employees is effective from August 1, 2022, the state-owned insurance behemoth said in a statement.

The National Pension System (NPS) contribution is enhanced from 10% to 14% for nearly 24,000 employees who joined after April 1, 2010, the LIC said while expressing gratitude to the government for the wage revision.

Not just that, a one-time ex-gratia payment to LIC pensioners was also made to more than 30,000 pensioners and family pensioners, it said.

The hike is set to substantially impact LIC, with an estimated annual implication of over ₹4,000 crores. Once the increments are implemented, LIC’s annual wage bill will swell to over ₹29,000 crore.

In the current fiscal year, however, inclusive of arrears, the financial implications for the corporation will be higher at ₹7,000 crore—taking FY24’s total wage bill to ₹32,000 crore.

ALSO READ | Bank employees’ wage hike — Union wants to charge 4% levy on net salary arrears

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Life insurance industry sees growth in February, largely driven by LIC

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The life insurance sector witnessed a surge in performance during February. The driving force behind the industry’s overall growth was the performance of the Life Insurance Corporation (LIC). LIC marked its second consecutive strong month, displaying growth across key indicators.

LIC reported a 67% increase in February premiums, accompanied by a 28% rise in Total Annual Premium Equivalent (APE). The Q4FY24 total APE witnessed 32% growth, and the retail APE marked a 13% increase.

Among other top performers were Max Life Insurance and SBI Life Insurance.

Max Life Insurance reported a 51% increase in February premiums, with a 36% surge in total APE. For the entire Q4FY24, Max Life’s APE grew by 44%, while the retail APE witnessed a 34% increase.

SBI Life Insurance, on the other hand, recorded a 32% growth in February premiums, with a 36% rise in total APE. Q4FY24 saw a 30% increase in total APE, and the retail APE experienced 26% growth.

Both Max Life and SBI Life have emerged as consistent outperformers this quarter.

Despite a slower start to the year, ICICI Prudential Life Insurance witnessed a strong rebound in February with a 33% increase in premiums and a 38% rise in total APE. Q4FY24 total APE grew by 19%, and the retail APE marked a 34% increase.

Similarly, HDFC Life Insurance recorded a decent performance after a period of slower growth. February premiums saw a 14% increase, with a 22% rise in total APE. Q4FY24 total APE grew by 16%, and the retail APE experienced 28% growth.

At the time of writing this report, LIC shares were trading 0.97% higher at ₹1,035.40 apiece on BSE. On the other hand, SBI life was 0.84% up at ₹1522.40 apiece.

HDFC Life Insurance, meanwhile, was 0.46% up at ₹624.60 apiece.

ICICI Prudential Life shares were trading 2.52% lower at ₹572.10 apiece.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

LIC introduces a new plan named Amritbaal; all you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In a move aimed at securing children’s future, the Life Insurance Corporation of India (LIC) on Friday (February 16) unveiled its latest offering, ‘LIC’s Amritbaal.’

The new plan is an individual, savings, life insurance plan, specifically designed to have an adequate corpus to meet higher education and other needs of a child.

It facilitates the accumulation of corpus through guaranteed additions at the rate of ₹80 per thousand basic sums assured at the end of each policy year from the inception till the end of the policy term provided the policy is in force.

The minimum age at entry for LIC’s Amritbaal plan is set at birth, with a requirement of 30 days completed. On the other end of the spectrum, the maximum age at entry is capped at 13 years.

Looking towards the future, the plan guarantees a minimum age at maturity of 18 years and the maximum age at maturity is set at 25 years. The minimum sum assured is ₹2 lakh and no limit for the maximum basic sum assured, however, subject to conditions, the insurance behemoth said.

On the date of maturity, the sum assured on maturity along with guaranteed additions will be payable for in-force policy. The maturity amount can also be received through settlement options in instalments over 5, 10 or 15 years.

The proposer will have the option to choose “Sum Assured on Death” as per the two options available under each single premium and limited premium payment. During the risk cover period, for in-force policy death benefit payable will be “Sum Assured on Death” along with accrued guaranteed additions.

Further, LIC’s premium waiver benefit rider is available by paying an additional premium subject to the eligibility conditions and there is a rebate for a high basic sum assured as well as for proposals completed under online sale.

Furthermore, the plan’s non-linked, non-participating nature and loan shall be available during the policy term subject to the conditions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SBI reclaims the most valuable PSU tag following a 10% drop in LIC’s share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In less than a month of losing the tag—most valuable public sector undertaking (PSU), State Bank of India (SBI) reclaimed the lost crown on Tuesday, after a sell-off in the Life Insurance Corporation’s shares eroded more than ₹70,000 crore of market capitalisation over the last three days. At ₹6.3 lakh crore, SBI currently commands about ₹250 crore higher market cap than that of LIC.

The largest insurer, which had a market valuation of ₹5.5 lakh crore post its listing in May 2022, had seen the valuation come off to as low as ₹3.4 lakh crore in March 2023. However, since then, the stock has surged a whopping 108%, taking the valuation to ₹7 lakh crore on February 8.

The sell-off in PSU stocks has wiped out investor wealth of more than ₹5 lakh crore over the last three days, after lower-than-expected earnings for the third quarter of FY24 from a handful of PSUs and stretched valuations led to profit booking.

Nevertheless, LIC reported a decent set of numbers in the third quarter of FY24. The insurer posted a 200 basis point (bps) improvement in the value of the new business (VNB), which grew by 16.6% for the nine months ended December 2023.

However, a 7% growth in annual premium equivalent (APE) in Q3 failed to arrest a nine-month decline, yet the focus on profitable non-par plans remains a positive.

BOB Capital Markets, which downgraded the stock to ‘hold’ from ‘buy’ on stretched valuations, wrote, “Though we remain positive on LIC given its entrenched brand equity and market leadership, the recent 30% plus rally leaves just 5% upside and compels us to downgrade the stock from ‘“buy’ to ‘hold’.

Of the 19 analysts who track the stock on Bloomberg, 63% have a ‘buy’ recommendation on the stock. While 26% suggest a ‘buy,’ the remaining 11% have a ‘sell’ rating on the stock.

ALSO READ | Here’s why SBI may not raise fixed deposit rates anytime soon

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

LIC shares up 4%; will India’s most valuable PSU continue its recent bull trend on D-St?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Life Insurance Corporation of India (LIC), which rallied nearly 30% so far this year and were up 80% in the last one year, gained another 4% in Monday’s trade. The state-owned insurer posted a strong set of third quarter numbers, delivering 16.6% value of new business (VNB) margin over the first nine months of this fiscal, aided by robust growth in the non-par segment, driven by launch of new products.

If one goes by market analysts, the LIC stock has potential to further rise up to ₹1,300 level in the next one year.

LIC’s strategy stays pivoted on the rising share of non-par products in the product mix and on delivering absolute VNB growth, said analysts at brokerage Emkay Global. The LIC management expects annual premium equivalent (APE) growth to improve from hereon, propelled by product launches across categories.

Further, LIC’s focus on digital initiatives is likely to drive customer acquisition and customer servicing, Emkay Global said in its latest note.

“To bake-in the Q3FY24 developments, we increase our VNB margin estimate by 1 percentage points and of APE by 3%, which results in 9-11% growth in FY24E-26E VNB. After the stellar run-up in the stock price post our upgrade (57% outperformance vs Nifty), we take a breather and move to ‘Add’ rating from ‘Buy’, with our revised Dec-24E target price of ₹1,200 per share (from ₹975 earlier), implying Dec-25E P/EV of 0.9 times,” the brokerage noted.

Domestic broking firm Kotak Institutional Equities has raised its target on the LIC stock to ₹1,300 from ₹1,040 per share and also revised its embedded value (EV) estimate by 5.7-6.8%, largely reflecting higher unrealised gains and the recent market rally. Tailwinds to LIC’s equity portfolio provide a further upside, Kotak said.

The brokerage also acknowledged that LIC’s value remains sensitive to capital market movements, any correction in capital markets can provide a downside to its enterprise value and fair value.

LIC recently overtook State Bank of India (SBI) to become India’s most valuable state-run company in terms of market capitalisation. At the start of trading on Monday, LIC had a market capitalisation of ₹6.81 lakh crore, compared to SBI’s ₹6.38 lakh crore.

One must note though, that LIC operates on a very low float in the market as the government still holds a 96% stake in the insurance company. The government had divested only a 3.5% stake at the time of its IPO in May 2022, which is to date, the country’s largest public issue.

Speaking to CNBC-TV18 on December 18, Deepak Shenoy of CapitalMind said, “LIC is going to be among the top eight most profitable companies in India in the next 2 years and it’s a business that is worth keeping for a longer time and it will get revalue as more information starts to be available.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

LIC expects income tax refund of ₹25,464 cr in Q4

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Life Insurance Corporation of India (LIC) has received an income tax refund order of ₹25,464 crore, and it is likely to be realised during the current quarter, its chairman Siddhartha Mohanty said. Last month, the Income Tax Appellate Tribunal (ITAT), Income Tax Department, issued intimation for a refund of ₹25,464.46 crore. The refund is related to interim bonuses to policyholders in the past seven assessment years.

“We are pursuing the matter, and we are hopeful of getting a refund from the Income Tax Department during this quarter itself,” Mohanty said during the post-result interaction. During the quarter, he said, the Life Insurance Corporation of India (LIC) would be launching more new products, including child protection.

In the third quarter, LIC launched Jeevan Utsav, Index Plus and some more products, helping it to increase the value of new business (VNB) margin levels to 16.6%. The refund is likely to boost the bottom line of the corporation in the fourth quarter.

The state-owned insurer last week reported a 49% jump in net profit to  ₹9,444 crore for the third quarter ended December 2023 against ₹6,334 crore in the year-ago period. Its net premium income improved to ₹1,17,017 crore in the third quarter of the current fiscal from ₹1,11,788 crore in the same period a year ago.

LIC’s total income also rose to ₹2,12,447 crore in the latest December quarter compared to ₹1,96,891 crore in the year-ago period. The LIC board has approved an interim dividend of ₹4 per equity share of face value of ₹10 each for FY24.

The profit for the nine months that ended December 2022 was ₹22,970 crore is not comparable since it included an amount of ₹4,542 crore (Net of Tax) pertaining to the accretions on the Available Solvency Margin for the last quarter of 2021-22, which was transferred from Non-Par fund to shareholders account on September 30, 2022, Mohanty had said. The total premium income for the nine-month period ended December 31, 2023, was ₹3,22,776 crore compared to ₹3,42,244 crore a year ago.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Value of shares invested by LIC rises from ₹3 lakh crore to ₹13 lakh crore in 10 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Life Insurance Corporation of India (LIC), which is known for taking advantage of every swing in the market, has cut down its holdings to an all-time low of 3.64% in the December quarter. Yet, the value of shares held by the insurer rose to a record high of ₹ 13 lakh crore. Thanks to the unprecedented rally in stocks across the board.

The increase in invested value turns out to be a four-fold jump over the last ten years, despite cutting down the number of companies in which it has at least 1% holding. The benchmark Nifty returned 245% during the same period.

According to data sourced from primeinfobase.com, LIC had invested in as many as 318 companies as of December 2013, which has come down to 277 in December 2023. The average holding of LIC in the Indian equity market for the last ten years stood at 4.2%.

Not surprisingly, the largest company, Reliance Industries, contributed the most to LIC’s holding. LIC owns 6.2% of Reliance Industries, which alone is valued at ₹1.2 lakh crore. However, in percentage terms, LIC’s highest holdings among the largest corporations include ITC, Larsen & Toubro, State Bank of India, HDFC Bank, ICICI Bank and among others.

Source: Bloomberg

On Thursday, the market capitalisation of the largest public sector unit—LIC—hit a record high of ₹7 lakh crore. Shares of LIC have rallied by as much as 80% over the last three months, helping the insurer improve its position in the market cap league table. LIC is now the most valuable public sector unit and the fifth-largest listed firm in the country. The market valuation of LIC is now only behind Reliance Industries, Tata Consultancy Services, HDFC Bank and Infosys.

Pranav Haldea, Managing Director, PRIME Database Group, attributed the drop in LIC’s holdings to profit booking. Insurance companies together sold a net of ₹15,622 crore worth of shares in the December quarter. “A major portion of selling can be attributable to LIC as it commands a lion’s share of investments in equities by insurance companies,” added Haldea.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow