LIC Surpasses SBI, Emerges as India's Top Valued PSU Stock

In the past week, Life Insurance Corporation of India (LIC) experienced a 9% increase in its stock value, making it the most valuable PSU (Public Sector Undertaking) stock in India, surpassing State Bank of India (SBI). LIC's market capitalization reached over Rs5.75 lakh crore, while SBI's was around Rs5.65 lakh crore.


Last month, the finance ministry exempted LIC from the 25% minimum public shareholding (MPS) norms until 2032. This exemption reduced the chances of the government selling its stake (offer for sale), leading to a positive impact on LIC's stock. SEBI rules require listed companies to maintain a 25% public float, but LIC was granted an exemption.

LIC's stock hit a 52-week high of Rs.919.45 with a 3% rally. The exemption from MPS norms and positive assessments from brokerages, such as Emkay Global and Geojit, contributed to the stock's performance. Emkay Global raised its target price to Rs.975 per share, citing attractive valuation and growth prospects in FY25. Geojit increased its target to Rs.823 based on FY25E embedded value per share.

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The government had sold a 3.5% stake in LIC through its IPO in May 2022, raising around Rs.21,000 crore. This IPO remains India's largest to date. The recent surge in LIC's stock is attributed to favorable valuations, strong growth, and optimism about a revival in FY25, along with the possibility of increased dividends.

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