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A combination of factors like proposed regulatory changes, business performance, head honcho from private sector, higher profit booking and issue of bonus shares seems to be the reason for the share of Life Insurance Corporation of India's (LIC) shares going up in the market, said experts.
The LIC scrip on Wednesday opened at Rs 723 and during the intra-day trade it touched a high of Rs 732 and a low of Rs 719.95.
The scrip touched a 52 week high and low of Rs 920 and Rs 588 respectively.
"The government's proposal to issue composite insurance licence (composite insurer is the one who can sell life and general insurance policies), news of government planning to hire someone from the private sector to head LIC, old news of higher profit booking leading to the hope of higher dividend or issue of bonus shares could be the reason for scrip going up," an industry expert told IANS preferring anonymity.
That aside, the life insurance giant is also growing business, the proposed changes in the regulations by the sectoral regulator would also help LIC, could also be the reasons, another industry expert told IANS preferring anonymity.
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A change in the accounting policy resulted in LIC's profit shooting up by Rs 14,271.80 crore to Rs 15,952.29 crore for the Q2FY23.
As per the new policy, the amount pertaining to the accretion on the available solvency margin from non-participating policies to shareholder's account. As a result, the net profit for Q2FY23 went up to that extent.
It is said LIC is planning to transfer a huge sum from the non-participating policyholder's funds to shareholders' fund account.
However, the current market price (about Rs.724) is nowhere near its initial public offer (IPO) price of Rs 949 this year.
--IANS
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