The dividend recommendation comes as the insurance behemoth received a tepid response from its mega-initial public offering (IPO). Here’s what investors should know
LIC declares dividend: State-run insurance giant Life Insurance Corporation of India (LIC) declared a dividend of Rs 1.50 per equity share with a face value of Rs 10 each for the financial year 2021-22 (FY22), subject to shareholders’ nod. “The Board of Directors, in its meeting held on 30.05.2022, have proposed dividend of Rs 1.50 per equity share with a face value of Rs 10 each for the year ended March 31, 2022, which is subject to the approval of shareholders in AGM,” a regulatory filing said.
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The dividend recommendation comes as the insurance behemoth received a tepid response from its mega-initial public offering (IPO). The stock had touched an all-time low of Rs 801.55 after a weak listing against the issue price of Rs 949. During Monday’s trading, the stock closed at Rs 837.05 — a discount of nearly 12 per cent to the IPO price.
According to stock market experts, for investors looking to make fresh positions, LIC shares are quality stocks with strong fundamentals. They advised fresh investors to wait for some more dip and initiate accumulating at around Rs 800 levels maintaining stop loss at Rs 735 apiece levels.
LIC also declared its first result after getting listed earlier this month. The corporation continues to trade at a discount to its issue price of Rs 949 per share. It reported a net profit of Rs 2,409 crore for the quarter ending March 2022, which was 17.41 per cent lower as compared to Rs 2,917.33 crore reported in the year-ago period.
The company’s net profit for the entire fiscal was reported as Rs 4,043.12 crore, which was 39.4 per cent higher as compared to Rs 2,900.56 crore in FY21.
The total revenue in Q4 FY22 came in at Rs 2,11,471 crore, which was 11.64 per cent higher as compared to Rs 1,89,176 crore revenue reported in the corresponding quarter last year.
The company also noted that its net premium income, during the quarter under review, climbed to 1,44,158.84 crore. This marked a 17.88 percent increase as against Rs 1,22,290.64 crore reported in Q4 FY21.
According to LIC, its income from first-year premium rose to Rs 14,663.19 crore, marking a 32.65 per cent YoY surge. From renewal premium, the income rose 5.37 per cent to Rs 71,472.74.05 crore, and through single premium, it increased by 33.70 per cent to Rs 58,250.91 crore.
The 13-month persistency ratio – a key metric to assess the flow of renewal premiums from policyholders – stood at 69.24 per cent at the end of Q4 FY22, as compared to 73.94 per cent in the year-ago period.
The much sought-after IPO (initial public offer) of LIC made its debut at around 8 per cent less than its issue price, in a choppy market condition mainly because of the geopolitical tensions arising out of the Russia-Ukraine war.
