LIC will soon pay a dividend; Know the record date, dividend amount, other details
India’s largest insurer and largest domestic financial investor Life Insurance Corporation of India, while unveiling its first results after listing, announced a dividend of Rs 1.50 per share with a face value of Rs 10 each, which is submitted for shareholder approval at its next annual meeting. general meeting (GA). The company has now set the record date for the payment of its first dividend. The record date for the dividend payment will be August 26, 2022, LIC said in an exchange filing. Additionally, the company’s first Annual General Meeting will be held on September 27, 2022. LIC went public in May.
The company has set the date for recording its dividend. “The record date for the dividend payment will be August 26, 2022,” LIC advised in an exchange filing on Monday. LIC, which went public in May, will hold its first annual general meeting on Sept. 27, 2022, according to stock exchange filing.
Additionally, the insurer’s board on Monday gave its approval to invest Rs 80.67 crore in the rights issue project of its joint venture LIC (Nepal) Ltd.
In a separate filing, LIC informed that the central government has appointed Suchindra Mishra, additional secretary of the Department of Financial Services, as the government director of its board with immediate effect, replacing Pankaj Jain.
LIC reported a 17% drop in its consolidated net profit to Rs 2,409 crore for the fourth quarter from Rs 2,917 crore in the same quarter a year ago, while sharing its first profits after its IPO. The insurer’s total revenue rose to Rs 2,12,230 crore from Rs 1,90,098 crore in the same period of the previous financial year.
The public insurer went public on May 17, 2022, at a discounted price. LIC shares were allocated to investors at Rs 949 each. The stock is now around 34% down from its issue price of Rs 949.
Brokerage firm Motilal Oswal has given the insurance giant a “Buy” rating. He said he found a 0.7x FY24E EV valuation reasonable. “LIC’s valuation at 0.7x FY24E EV appears reasonable given the gradual margin recovery and diversified business mix, although high sensitivity to equity market volatility remains an overhang,” the note reads. . The brokerage initiated a hedge on LIC shares with a “Buy” rating and a target price of Rs 830 each.
Motilal Oswal estimates that LIC will reach a CAGR of around 10% in the NBP in FY22-24E, while the new business value (NBV) margin is expected to improve to 13.6% thanks to the improved product mix and better profit retention. However, he estimates that LIC’s operational RoEV remains modest at around 9.7% on a lower margin profile than its private peers.
According to the brokerage, key downside risks include a slow rise in personal protection and non-participating savings, weak banca channel share and productivity, and a sharp correction in equity markets.
“LIC enjoys a high market share in the annuity segment (77% in FY21) due to its strong positioning in the group business. The share of annuities in the total new business mix was 21% in FY21. of growth is immense. However, private players are also catching up as they recorded a CAGR of 23-131% over the past three years (fiscal years 2019-22),” the note states.
Motilal Oswal felt that while the focus on profitable growth will force LIC to reassess its growth trajectory, managing such a large franchise will be a difficult task and will require superior execution over the next few years.
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