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LIC Share Price – Analysis & History

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LIC stands for Life Insurance Corporation of India. After India’s Parliament passed the Life Insurance Corporation Act in June 1956, it began operating as a corporate entity in September of that same year. The LIC Act became effective in July of 1956. It contributed to the nationalization of India’s private insurance industry. It is one of India’s most important financial institutions. The LIC’s corporate office is located in Mumbai, Maharashtra.

 

 

Functions Of LIC

Some of the major functions of LIC are as follows:-

 

 

Objectives Of LIC

 

 

History of LIC:

 

In the year 1818, life insurance as we know it now was introduced to India from England. The first life insurance firm on Indian soil was the Oriental Life Insurance Company, founded in Calcutta by Europeans. Indian nationals were not covered by any of the insurance firms founded during that time because they were all created with the intention of serving the needs of European society. Later on, however, thanks to the efforts of notable individuals like Babu Muttylal Seal, foreign life insurance companies began covering Indian lives. However, Indian lives were classified as second-class lives and were subject to significant premium increases.

 

In 1870, the Bombay Mutual Life Assurance Society became the first life insurance provider in India, and it offered standard rates for coverage of Indian lives. In order to spread awareness of insurance and social security through insurance to various societal groups, insurance companies first emerged as extremely patriotic Indian businesses. One of these nationalist-inspired businesses was the Bharat Insurance Company, founded in 1896. More insurance businesses were founded as a result of the Swadeshi movement from 1905–1907. Established in 1906 were United India in Madras, the National Indian and National Insurance in Calcutta, and the Co-operative Assurance in Lahore. The Hindustan Co-operative Insurance Company was founded in 1907 in a chamber of the Jorasanko, the famed poet Rabindranath Tagore’s residence in Calcutta.

 

During this time, businesses including the Indian Mercantile, General Assurance, and Swadeshi Life (later Bombay Life) were founded. India did not have any legislation governing the insurance industry prior to 1912. The Provident Fund Act and the Life Insurance Companies Act were both passed in 1912. The Life Insurance Companies Act of 1912 mandated that an actuary certify the premium rate tables and periodic company valuations. However, the Act discriminated in numerous ways between foreign and Indian enterprises, which disadvantaged the latter.

 

During the first two decades of the twentieth century, the insurance industry expanded significantly. In 1938, it increased from 44 firms with a total business-in-force of Rs.22.44 crore to 176 companies with a total business-in-force of Rs.298 crore. Many financially questionable ventures that were floated during the insurance industry’s explosion also failed terribly. The Insurance Act of 1938 was the first piece of legislation to strictly impose governmental control over the insurance industry and to regulate both life and non-life insurance. A bill to alter the Life Insurance Act of 1938 was filed in the Legislative Assembly in 1944, which gave rise to a growing call for the nationalization of the life insurance sector.

 

However, the nationalization of life insurance in India didn’t occur until much later, on January 19, 1956. At the time of nationalization, there were around 154 Indian insurance companies, 16 foreign companies, and 75 provident organizations. The process of nationalization was carried out in two phases; first, the administration of the enterprises was taken over through an ordinance, and later, the ownership was taken over through a complete statute.

 

The Life Insurance Corporation Act was approved by the Indian Parliament on June 19, 1956, and the Life Insurance Corporation of India was established on September 1, 1956, with the aim of extending life insurance much more broadly and, in particular, to rural areas in order to reach all insurable persons in the nation and offer them adequate financial protection at a fair price. Aside from its corporate office, LIC had 212 branch offices, 33 divisional offices, and 5 zonal offices by 1956. The necessity to extend the business and set up a branch office at each district headquarters was felt in the later years because life insurance contracts are long-term contracts and require a variety of services during the currency of the policy. The LIC underwent reorganization, and numerous new branch offices were established.

 

Reorganization led to the transfer of servicing responsibilities to the branches, which were made accounting units. The corporation’s performance was greatly improved by it. From about 200.00 crores in new business in 1957, the organization only surpassed 1,000.00 crores in 1969-70, and it took another decade for LIC to surpass 2,000.00 crores in new business. However, because of the reorganization that took place in the early 1980s, by 1985–1986 LIC share had already surpassed 7000.00 crores in sum assured to new policies. 

 

A total of 2048 completely computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices, and the corporate headquarters are currently used by LIC to carry out its operations. 

 

Life Insurance Corporation Of India Shareholding Pattern

 

Category of shareholder Total no. shares held Shareholding as a % of total no. of shares 
(A) Promoter & Promoter Group 6,10,36,22,781 96.50
(B) Public 22,13,74,920 3.50
(C1) Shares underlying DRs 0 0.00
(C2) Shares held by Employee Trust 0 0.00
C) Non-Promoter-Non Public 0 0.00
Grand Total 6,32,49,97,701 100.00

 

Summary statement holding of specified securities as of 30 Jun 2022

 

Category & Name of the Shareholders Total no. shares held Shareholding %
B1) Institutions 0 0
Mutual Funds 4,70,24,137 0.74
Alternate Investment Funds 47,067 0.00
Foreign Portfolio Investors 78,48,520 0.12
Financial Institutions/ Banks 78,71,080 0.12
Any Other (specify) 1,19,22,274 0.19
Qualified Institutional Buyer 1,19,22,274 0.19
Sub Total B1 7,47,13,078 1.18
B2) Central Government/ State Government(s)/ President of India 0 0.00
B3) Non-Institutions 0 0.00
Individual LIC share capital upto Rs. 2 Lacs 11,86,10,742 1.88
Individual LIC share capital in excess of Rs. 2 Lacs 49,87,150 0.08
NBFCs registered with RBI 1,81,862 0.00
Any Other (specify) 2,28,82,088 0.36
Bodies Corporate 1,98,18,690 0.31
Non-Resident Indian (NRI) 21,17,042 0.03
Trusts 2,26,199 0.00
Clearing Members 7,20,157 0.01
Sub Total B3 14,66,61,842 2.32
B=B1+B2+B3 22,13,74,920 3.50

 

Statement showing shareholding pattern of the Public shareholder as of 30 Jun 2022

 

Key Highlights for April – June 2022 (Q1) of FY 2022-23

 

 

 

 

 

 

 

 

 

 

Key operational and financial metrics:

 

Sr No. Particulars  Q1 FY 2023 (Rs in Crs) Q1 FY 2022 (Rs in Crs) Growth %age
Total New Business Premium Income (Individual)  10,938 8,040  36.04
Renewal Premium (Individual) 49,069 45,048 8.93
Total Premium (Individual) 60,007 53,088  13.03
Group Business Premium  38,345 28,633  33.92
Total Premium Income 98,352 81,721 20.35
Number of Policies sold 36,81,764  23,07,513 59.56
Assets under Management 41,02,041.84 38,13,370.14  7.57

 

Frequently Asked Questions (FAQs)

 

LIC share price is INR 653.00 as of  21 September 2022. 

 

As on 21 September 2022: 

 

Key metrics to analyze any share price are: 52-week high, a 52-week low, 1-year return, 5-year return, etc. 

 

Peers of LIC include Bajaj Finserv Ltd, SBI Life Insurance Company Ltd, and HDFC Life Insurance Company Ltd.

 

The market cap of LIC is 4.1 Lakh Crore as on 21 September 2022.

 

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