22-Dec-2023
2 mins read
In a significant market movement, Life Insurance Corporation (LIC) of India’s shares escalated to a 52-week zenith at Rs 820.05, marking a 7% increase. This rise was witnessed in the BSE morning session on December 22, triggered by a recent government declaration.
Beginning the day’s trade at an impressive Rs 805.05, higher than the last close of Rs 764.55, LIC’s stock swiftly rose by 7.3%, achieving a new peak for the year. Around 9:50 AM, the stock further escalated, trading 5.49% higher at Rs 806.50.
Comparing LIC’s Annual Performance with Sensex
Over the course of the year, up to December 21, LIC’s stock has impressively grown by nearly 12%. In comparison, the broader market indicator, Sensex, has recorded an increase of over 16% during the same timeframe.
Government’s One-Time Exemption and Its Impact
LIC received a significant boost from the government’s decision to grant a one-time exemption. This allows the corporation to achieve a minimum public shareholding (MPS) of 25% by May 2032, extending the original deadline by a substantial margin.
Regulatory Filing and SEBI’s Guidelines
As stated in LIC’s regulatory filing on December 21, the Department of Economic Affairs has opted for a one-time exemption in the public interest. This exemption extends the timeline for achieving the 25% MPS to 10 years from the listing date. The Securities and Exchange Board of India (SEBI) typically provides five years for large-cap companies to reach the MPS limit. However, with its market capital exceeding Rs 100,000 crore, LIC now has an extended period to comply.
Extension of Deadline
Initially, LIC was required to meet the 25% MPS rule by 2027. However, the government’s extension grants India’s largest life insurer an additional 10 years to fulfil this requirement, easing the path ahead for LIC in the stock market.
LIC’s recent share price surge reflects investor confidence boosted by the government’s supportive stance, marking a significant milestone in the company’s journey on the stock exchange.