Shares of the country’s most significant insurer Life Insurance Corporation (NS: LIFI), have already been on a correction slide since its listing on the India good bourses on May 17, 2022, at a 9% discount.
Currently trading 0.3% higher at Rs 656.5 apiece, LIC’s shares have plummeted 30.8% per month compared to its IPO issue price of Rs 949/share, wiping off over Rs 1.8 lakh crore worth of its valuation since listing.
Given its attractive valuations, JP Morgan has initiated an overweight coverage on the insurance stock and has set a target price of Rs 840/share, an upside of 28%.
However, as LIC’s new business value comprises only 1% of its policies in force, the 0.75x P/EV is harsh for the insurer, even in a zero-growth scenario, considering 99% of its value from old policies.
According to analysts, LIC is continuing to grow recently, and a 6% estimated growth in FY22-24 is expected.