Mumbai 

Shares of Life Insurance Corporation of India (LIC) continue to reel under pressure and hit a new low of Rs 723.20, down 2 per cent on the BSE after the insurance behemoth reported a muted growth in the month of May.

The stock of state-owned insurer quoted lower for the eight straight trading day, and has declined 14 per cent during the period. The stock now trades at the lowest level since its debut on May 17, 2022. With the recent decline, the stock now quotes at a significant 24 per cent discount when compared with its issue price of Rs 949 per share. At the time of the IPO, retail investors were allotment shares at Rs 905 apiece, while policyholders received allottment at Rs 889 per share.

Meanwhile, adjusting for Covid-19-driven turbulence in FY21 (initial stringent lockdown) and FY22 (Delta wave), on a 3Y CAGR basis, the private sector delivered Retail Weighted Received Premium (RWRP) growth of 14.6 per cent and LIC posted 6.5 per cent growth for year to date (YTD) financial year 2022-23 (FY23), Emkay Global Financial services said in its insurance sector update.

According to analysts, LIC’s inability to move up in the customer segment by significantly changing its product and distribution mix means that the company will continue to lose market share.

The long-term story of the private life insurers, that they are sustainably gaining market share from LIC, remains unchanged. Beyond near-term turbulence, the sector’s RWRP growth should broadly track nominal GDP growth, with private leaders growing faster than that and LIC growing slower, the brokerage firm said with Hold rating on LIC with a target price of Rs 875 per share.