LIC shares record third straight day of downturn, plummet 25% from peak

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Life Insurance Corporation (LIC), India's largest life insurer, witnessed a further 2.80% decline in its share price during today's trading session, settling at ₹879.50 per share. This drop marks the stock's third consecutive decline, resulting in an accumulated decrease of nearly 8.2% over the past three days. The decline comes amidst the announcements of plans to increase wages by approximately 17% for its one lakh employees.

On Friday, the company announced that it had received government approval for the wage hike, effective August 1, 2022. This raise is expected to have significant financial implications for the company, with an estimated annual impact exceeding ₹4,000 crore for LIC. Post-hike, LIC's wage bill is anticipated to surpass ₹9,000 crore.

Also Read: LIC's journey so far: A muted debut, a long rough patch and a stellar rebound, this stock has seen it all Moreover, if the arrears for the current fiscal year amounting to ₹7,000 crore are included, the total wage payout for FY24 could reach ₹32,000 crore. Apart from the financial concerns, the selloff in PSU stocks has also fueled the stock downturn. So far this month, the stock has experienced a significant decline of 14% and is currently trading at a level approximately 25% below its all-time high of ₹1,175.

Between November and February, the stock underwent a substantial one-way surge, resulting in gains of nearly 70%. Also Read: PSU Banks vs Private Banks: Here's what 5 experts have picked This year has proven to be a milestone for LIC since its listing in May 2022. In January, the stock surpassed its IPO price for the first time post-listing and also emerged as the most valuable PSU firm, surpassing SBI.