Thought leadership: Here is what LIC Chairman MR Kumar has to say about business performance

“Investors have to remain patient for some time”, he remarks

Bears are currently dominating the markets. Not only Indian stock markets but also global markets are feared by the inflationary environment which has become a global concern. During this bear phase, India’s top corporates have lost a chunk of market value and have touched yearly lows. Recently listed Life Insurance Corporation of India (LIC) too has suffered a heavy blow. The bears have wiped off almost one-third of shareholders' wealth who had invested in the largest IPO of India-LIC. The stock is down to Rs 661.25 as of 20th June 2022, from its IPO price of Rs 949. That’s a decline of 30.3%. MR Kumar, Chairman of LIC, has expressed his views on the IPO, overall business and future outlook.

Talking about the decline in the share price MR Kumar said that the overall market decline was a concern which had impacted LIC shares as well. However, he pointed out that the insurance giant had had good business in the last 2-3 months where it had been growing at par or even faster in some metrics when compared with private players. “Investors have to remain patient”, he added. LIC will be coming out with its embedded value (EV) metric probably at June end.

LIC has a good dividend payout policy as it stands at almost 40% of the EPS. MR Kumar said that investors can expect the same policy to continue in the short term and may expect better dividends going ahead. Talking about some key growth metrics, he pointed out that management aimed at 40% YoY growth in non-PAR business, and 10-15% CAGR growth in total premiums. He also noted that the company has regained 3-4% market share in the last 3-4 months which would help the company grab most of the vast market opportunity.

For fiscal 2023, the company would be focusing on cost efficiency on a continual basis. He expects that the FY23 will be a transformational year where the focus will be on the digital front and non-par business.