LIC share price hits new 1-year low, down over 32% from record high | Stock Market News

Shares of Life Insurance Corporation (LIC), India’s largest life insurer, touched a new 52-week low of ₹806 apiece on Tuesday, January 14, breaking below its previous low of ₹820 apiece. However, the stock managed to close the session 2% higher at ₹825.

The stock has been on a downward spiral since August, ending four of the following five months in the red and losing nearly 30% of its value. From its all-time high of ₹1,221, the stock is currently down 32.5%.

Regulatory hurdles weigh on growth prospects

The life insurer posted a 13% drop in individual Annualized Premium Equivalent (APE) for December 2024. This followed a 12.4% contraction in November YoY. After strong pre-sales in September, this marked the third consecutive month of de-growth for LIC.

Industry growth was impacted by regulatory uncertainties regarding the Banca channel and the implementation of new surrender regulations, which affected lower ticket-size policies.

YTD growth for the sector remains strong at 14.5%, with private players achieving a robust 19.3% growth. However, LIC’s YTD growth nosedived in Q3, reducing to 4.4%, according to domestic brokerage firm JM Financial.

“LIC has struggled in Q3 post-surrender norms and the resultant commission changes. While LIC is now cheap at 0.6x FY26e EV after adjusting for MTM losses, continued contraction in new business implies we wait for a better opportunity,” the brokerage said.

LIC maintained a dominant 64.4% market share in group business, even as its premiums fell by more than half compared to the high base of last December, JM Financial added.

Meanwhile, LIC’s total premiums decreased by 41% year-on-year, reaching ₹13,523 crore in December. Individual single premiums grew significantly, rising 26% to ₹2,522 crore, compared to ₹2,000 crore in the same month last year, according to data published by the Life Insurance Council.

A strong channel push in September 2024—before the discontinuation of older products under the new surrender regulations—delivered ~47% Retail Annualized Premium Equivalent (APE) growth in that month. This strong pre-sales effort is now weighing on Q3 growth, said global brokerage firm Emkay Global Financial Services.

With the implementation of new surrender regulations, LIC has increased the minimum ticket size for many of its products, leading to a sharper decline in policy counts and affecting APE growth.

Trading at a significant discount to its EV, LIC’s valuation appears attractive. However, poor retail new business trends, the Insurance Amendment Act proposal to open up the individual agents’ channel, and the risk of the Old Tax Regime for Individual Taxation sunsetting in the upcoming Union Budget will likely keep LIC shares range-bound, Emkay Global noted in its sector report.

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