The mega Rs 21,000 crore share sale of LIC took place under difficult conditions which saw the stock lose about a quarter of its value. Investors have no reason to worry as the outlook for return on investment remains strong in the medium to long term, Chairman MR Kumar said.
Investors in LIC shares will need to be patient. Those who thought they could make quick money from the highly anticipated IPO were disappointed, but long-term investors could reap some benefits, Kumar told Economic Times.
Highlighting the headwinds, Kumar said that since the market has been falling due to factors such as war, global risk aversion of financial assets and monetary tightening, stock prices have steadily fallen. He further stated that as the market improves, LIC stock price will also improve. Investors should be patient, he added.
“We are positioning ourselves as the insurer of choice and that is why we have a 65% market share. With the evolution of the product line, investors will certainly get good returns in the medium to long term. Overall, we gained more than 3% market share between December and May,” the LIC boss said.
He further stated that LIC is aiming for growth rates above what the company normally gets from the non-peer (non-participating policy) segment and is confident that regardless of the circumstances, they will be able to meet the needs of the market. . .
Speaking about the IPO process during a recent interview with ET, Kumar said that “being a publicly traded entity has its challenges. We have another regulator watching over us and we have to make more disclosures than before. We also have shareholders who want good returns on their investments.
“Again, we had to transform ourselves. We have recruited a Chief Financial Officer and Market Investor Relations Manager, and are in the process of recruiting a Chief Digital Officer. We are committed to creating value, whether for a policyholder, a new shareholder or an institutional investor,” he told ET.
LIC’s share price has fallen sharply since its IPO on May 17, 2022. LIC’s shares were allotted to investors at Rs 949 each and listed on the stock exchange at a discount. The stock is down about 28% from its IPO issue price of 949 rupees.
Explaining the insurance giant’s long-term strategy, Kumar said that in five years, the company would like to retain its market share. Speaking of growth, he said it would be “misleading” to talk about growth when everyone in the industry is growing at over 60%. The insurance giant also aims to further penetrate Tier II and Tier III cities and expand its presence. “At the end of the day, I will still have the same market share, but the product mix will change. Currently, per premium, non-par is only 7%. We aspire to increase it to 25% over a five-year period,” he added.
Read all the latest news, breaking news, watch the best videos and live TV here.