MUMBAI: The national insurer, Life Insurance Corporation, Wednesday said it has received regulatory approval to continue to have higher promoter holding at 96.5% as against the mandated 75% for three more years, giving a big boost to the stock, which rallied 6.3% to close at Rs 989.8.
In an exchange filing, the insurer said the revised timeline to achieve 10% public shareholding is on or before May 16, 2027. Which means the government has time to divest 6.5% more over the next three years to achieve the 10% minimum shareholding.
LIC went public with nearly Rs 20,500 crore public issue in May 2022, making it the largest-ever IPO the market has even seen, with the government divesting a paltry 3.5% through the primary share sale. The initial plan was to divest at least 10%.
Being a government entity, markets watchdog Sebi allowed the higher shareholding by the government. At end March 2024, the public shareholding in LIC was at 3.5%.
Life Insurance Corporation has been given three more years by markets regulator the Securities and Exchange Board to the achieve 10% public shareholding, the largest life insurer said.
The minimum public shareholding norms mandate at least 25% public float for all listed companies.
The announcement boosted the LIC counter despite a volatile trade and the stock rallied to Rs 999.15 on the BSE intraday before closing with at Rs 989.80, up 6.3% over the previous close on the BSE against the Sensex losing 0.16%. Life Insurance Corporation of India market capitalisation increased to Rs 6.26 lakh crore on Wednesday. The company’s stock has rallied over 75% in the past one year.
After the IPO, the company had a forgettable start with the listing coming in at Rs 867, down 9% from the upper price band of Rs 949, on May 17, 2022. LIC shares remained in a downward trend for the next one year, declining 26% from the listing price until November 2023 when the stock began to pick up.
The share crossed its issue price for the first time on January 30 after the Reserve Bank allowed it to increase its stake in HDFC Bank.
For the December 2023 quarter LIC has reported a 49% year-on-year rise in net at Rs 9,441 crore. March quarter earnings are yet to be announced.
Stocks trade higher
The announcement boosted the LIC counter despite a volatile trade and the stock rallied to Rs 999.15 on the BSE intraday before closing with at Rs 989.80, up 6.3% over the previous close on the BSE