LIC earnings aftermath: Market cap slips by over ₹16,000 crores in 1 day


On Tuesday’s trading session, the largest insurer, LIC, saw a strong selloff before finishing near the day’s low. The performance follows LIC’s financial results for the period ending March 31, 2022. LIC’s stock, in particular, reflected the market’s pessimistic tone as well as the decline of other significant peers. In just one day, LIC’s market capitalization dropped by approximately 17,000 crores. Insurance stocks have been hammered, with LIC taking the brunt of the losses and SBI life assurance outperforming.

On Tuesday, LIC shares closed at ₹811.50 apiece down by ₹25.55 or 3.05% on BSE. The stock was trading near its day’s low of $810 per share. The shares were also a pair of rupees far from the 52-week low of ₹801.55 apiece on the exchange. At the price, LIC’s market cap stood at ₹5, 13,273.56 crore. This can be lower by ₹16,160.37 crores compared to the market cap of ₹5, 29,433.93 crore of the previous days.

LIC currently holds the 5th rank within the most valued companies list in terms of capitalization on BSE. For the year ended March 31, 2022, LIC posted an increase of 6.1% within the Net Premium Income at ₹4, 27,419 crore as compared to ₹4, 02,844 crore within the previous fiscal. LIC’s lucre for the complete year stood at ₹4,043.12 crores increasing by 39.39% as against ₹2,900.57 crores in FY21. Further, the Yield on Investments on policyholders’ funds excluding unrealized gains was at 8.55 you look after the fiscal FY22 as against 8.69% in FY21. The solvency ratio for the year ended March 31, 2022, was 1.85 against 1.76 for the amount ended March 31, 2021.

LIC board on Monday also recommended a dividend of ₹1.50 per share translating to a dividend payout of ₹948.75 crore which aggregates to about 23.46 you look after PAT. Since its initial public offering on May17, LIC has been subjected to a wave of pessimistic emotions. Its market cap declined by ₹2,081.38 crores during a single day to ₹1, 26,361.80 crore compared to the previous day’s ₹1, 28,443.18 crore. ICICI Prudential plunged by 2.02% and closed at ₹519.60 apiece. Its market cap dropped by ₹1,537.95 crores to ₹74,683.83 crores today compared to the previous day’s ₹76,221.78 crores. SBI Life finished at 1173.85 per share on the BSE, up 2.2 percent. Although LIC witnessed heavy loss today compared to its peers, the government-owned insurer remains the most important compared to them in terms of market cap and business module.

GDP is predicted to register a slower rate of 4.0-4.2% because the consumer spending and investments were hit by soaring inflation. A hike in oil prices because of the EU’s ban on Russian oil imports would act as a headwind in taming global inflation. Changes in policy by central banks would be a serious factor to be monitored within the coming days.”

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