India’s government-owned insurance giant, Life Insurance Corporation of India (LIC), has regained its status as the top-valued public sector undertaking in terms of market capitalization, surpassing the State Bank of India (SBI). SBI’s market value stands at Rs 5.63 lakh crore, slightly less than LIC’s Rs 5.64 lakh crore market cap. At 9:30 AM, SBI’s stock fell by 1.5% to Rs 624, while LIC’s shares traded at Rs 896 on the BSE, up by 0.2%. Meanwhile, the BSE Sensex decreased 1.02% to 72,386 points.
In 2023, LIC’s stock price increased by over 22%, and 7.5% in 2024. In contrast, SBI grew nearly 5% in the previous year but has declined over 1% this year. LIC recently announced its plan to introduce three to four new products in the upcoming months, aiming for double-digit growth in its new business premium for the fiscal year. In a recent interview with CNBC, LIC’s Chairman Siddhartha Mohanty showed confidence in achieving this goal, partly due to an increase in individual retail business.
On November 29, LIC launched a unique plan called Jeevan Utsav. The recent rise in LIC’s stock is linked to the popularity of this non-participating product, as Kotak Institutional Equities suggested. The brokerage firm believes LIC’s marketing capabilities will effectively promote these non-participating policies. The success of Jeevan Utsav, according to Kotak, will be evident in the next four months. Kotak has maintained a ‘buy’ recommendation for LIC, with a price target of Rs 1,040, citing its attractive valuations.
Kotak Institutional Equities has also raised its target price for SBI to Rs 760, continuing its ‘buy’ rating. The brokerage firm now favors SBI as its top pick in the PSU sector, recognizing its robust performance through the last credit cycle. Kotak advises investors to prefer SBI over other PSU banks, highlighting its superior performance in terms of credit cost, liability, asset franchises, and technological advancements. This assessment reaffirms SBI’s leading position in the PSU banking sector.
