Life Insurance Corporation of India (LIC) on Wednesday left State Bank of India (SBI) behind in market capitalisation to become India's most valued PSU stock.
LIC shares rallied over 3% to a fresh 52-week high of Rs 919.45 taking its market value above Rs 5.75 lakh crore-mark. On the other hand, SBI's market cap was around Rs 5.65 lakh crore in the morning session.
Last month, the finance ministry had exempted the PSU insurer from complying with 25% minimum public shareholding (MPS) norms till 2032.
The stock has been rallying since then as the exemption reduces the possibility of an offer for sale (OFS) by the government.
Sebi rules mandate all listed companies to maintain 25% public float but newly-listed companies are granted a three-year window to fulfil the requirement. In the case of companies with a post-issue market capitalization of more than Rs 1 lakh crore, the timeline to meet the 25% MPS rule is five years.
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What irked investors?
In May 2022, the government had sold a 3.5% stake in LIC IPO which was an entirely (offer for sale) worth around Rs 21,000 crore. It remains India's largest IPO to date.
The latest round of buying the heavyweight counter comes after brokerages upgraded the counter with buy calls.
Emkay Global had recently raised its target price on LIC to Rs 975 per share citing attractive valuation, revival of growth in FY25, and the possibility of a step change in dividend will continue to support its share price performance.
«With the worst, in terms of structural issues of growth differential and sticky cost, now likely to be behind, LIC shares have entered the outperformance mode since H1FY24 results, led by favourable valuation,