LIC OF INDIA stock

LIC Of India

CMP: 803.00

Market Cap: 5,08,024cr

Book Value: 154

Face Value: 10

52 week high/low: 1222/715

Life Insurance Corporation (LIC) is the largest insurance provider in India. It has a market share of about 66% in new business premium. The company offers participating and non-participating insurance products like unit-linked insurance products, saving insurance products, term insurance products and annuity & pension products.

Largest Insurance Company

LIC is India’s largest life insurer and the world’s leading insurance brand. LIC is the 4th largest insurer in the world based on life and accident and health reserves, as ranked by S&P Global Market Intelligence.Its market share across categories is:

By Premium: 61.07% in H1 FY25

By Policies: 68.7% in H1 FY25 

By Number of Agents: 47.56% in H1 FY25 

Product Portfolio

The company has a portfolio of 16 participating insurance products, 25 non-participating products including 4 annuity products, 11 group products including 1 credit life and 1 annuity product, and 8 riders. Its product mix includes traditional endowment plans, whole life plans, term insurance plans, pension plans, unit-linked insurance plans, health insurance, and microinsurance products.

New Launches

In H1 FY25, the company launched 4 new Non-Par products- LIC’s Yuva Term, LIC’s Digi Term, LIC’s Yuva Credit Life, and LIC’s Digi Credit Life. In Oct 2024, it launched LIC’s Single Premium Group Micro Term Insurance Plan and 2 new individual Non-Par products, namely, LIC’s Nivesh Plus and LIC’s Bima Jyoti.

Key Operational Metrics

Total Premium Income (Rs. Cr): 4,75,070 in FY24 

New Business Premium (Rs. Cr): 57,716 in FY24

Renewal Premium (Rs. Cr): 2,46,052 in FY24

AUM (Rs. Cr): 51,21,887 in FY24 

Embedded Value (Cr): 7,27,344 in FY24

Solvency Ratio: 198% in FY24

Claim Settlement Ratio: 98.15% in FY24

GNPA: 2.01% in FY24 

Conservation Ratio: 89.84% in FY24

Number of Policies Sold (Cr): 2.03 in FY24

Distribution Network

The company’s distribution network includes 14.4 lakh exclusive agents, 83 corporate agents, 153 insurance marketing firms, 19,000+ micro-insurance agents, 92 bancassurance partnerships, 40,000 premium points, 300 brokers, and 3,636 branch and satellite offices across 36 states and Union territories, covering 92% of districts in India. It also operates overseas branch offices in the UK, Fiji, and Mauritius.

Distribution Mix FY24 (New Business Premium)

Agency: 96%

Banca: 3.6%

Others: 0.4% 

State-Wise Revenue Mix FY24

Maharashtra: 13%

West Bengal: 11%

UP: 10%

Tamil Nadu: 7%

Karnataka: 7%

Gujarat: 6%

Rajasthan: 5%

Others: 49% 

Digital Initiatives

The company offers a digital customer portal and LIC Digital Mobile App, a digital channel for collections, an in-house core insurance package, e-FEAP for fully digitalized internal operations, and Enterprise Document Management Systems (EDMS) to facilitate servicing and information delivery to its customers. The LIC customer APP users have grown from 57.5 lahks in FY22 to 72.9 lahks in FY24, and website registered customers grew from 195 lahks in FY22 to 241 lakhs in FY24. 

Focus

The company aims to increase market share across all categories, diversify its product mix by enhancing the share of non-participating policies in the individual segment and addressing gaps in its product portfolio with new launches. It also aims to strengthen its agency channel while expanding its banca and alternate distribution channels.

Insights into hidden Value 

Cash Flows

If you look at the cash flow statement of LIC for past 6 yrs..

Interest/Dividend Received:

2019: 1,99,144cr

2020:2,31,231cr

2021:2,48,888cr

2022:2,50,560cr

2023:2,68,931cr

2024:2,93,174cr (47.21% more than 2019)

Interest/Dividend Received has increased steadily & its 47% higher in 5yrs.

Each year: (Investment Purchased)<(Interest/Dividend Received)+(Investment sold)+(Cash flow from Operations) in cr

2019: 316629<199144+133824+13274 

2020: 426193<231231+152516+54367

2021: 499555<248888+274807+80602

2022: 427781<250560+190388-3783

2023: 543739<268931+224908+54,519

2024: 576037<293174+261904+26122

2025: 576090<309844+307792-9145

If you look at amount of investment purchased which has grown from 3,16,629cr (2019) to 5,76,090cr (2025) 81.94% in 6 yrs...

Current Market Cap is: 5,08,024cr ( cmp 803) which is less than the amount of investments purchased by LIC in year 2025.

Net Investment Purchased = (Investment Purchased)-(Investment sold)

2019= 1,82,805cr

2020=2,73,677cr

2021=2,24,748cr

2022=2,37,393cr

2023=3,18,831cr

2024=3,14,133cr

2025=2,68,298cr

In 7yr total net Investment reinvested=18,19,885cr  18.19 lakh cr

Divide by 7 ie on avg 2,59,983cr  (2.59 lakh cr) is being reinvested every year.

We can purchase 100% of LIC stk for 5,08,024cr (5lakh cr) & LIC is generating free cash to reinvest of 2,59,983cr (2.59 lakh cr) every year for past 7 yrs..

So in 2yrs LIC buys Investment worth 5,19,966cr 

So in 2 yrs LIC intrinsic Value doubles( at current valuations.. )

An investment whose assets double in 2yrs.. is a very valuable investment. Why is it not increasing in price?

 The reason is.. govt. Is voted into power by people. Govt. would want their voters to benefit from disinvestment.. & hence issued the shares at a discount 950/- per share ( price discovery was 2000/- per share by merchant bankers).. but the large players donot want/like such distribution.

After IPO the price was suppressed to make the weak hands sell..

We can see this from shareholder data..

June 2022 no of shareholders: 37,89,053 

June 2025 no of shareholders: 22,77,180

In 3 yrs 15,11,873 shareholders have sold their shares..

More than 5 lakh shareholders per year have sold..( weak hands) 

While big investors have lapped it up.. as LIC is churning out 2,59,983cr as free cash flow every year.

Now for comparison if we look at how much interest/ Dividend/other income is being generated by other insurance company

Interest/Dividend/Other income

LIC Of India:3,09,844cr

SBI life 19,237cr

HDFC Life:11,603cr

Icici Pru life:11,053cr

As can be seen from interest/ Dividend income LIC cash flow from interest Dividend cannot be achieved in next 2 decades also by pvt insurers..

Peer comparison

If you look at ROCE(Return On Capital Employed): 53% for LIC .. best ROCE is 16.8% SBI Life..  

PAT: 48,725cr closest rival: 2488cr SBI life

At PE of 11.88 LIC is a stock for life .. which will continue to give exceptional returns. Fair value of LIC according to me is north of 10,000/- per share

310+million policy holders of LIC which is almost equal to US population of 340 million.

Indian budget 2025 states total receipts(income) of govt of India: 35lakh cr

Total expenditure of govt of India 2025: 51 lakh cr

LIC assets valuation: 57lakh cr

LIC has assets more than the Budget expenditure of govt of India.

You can buy 100% of LIC for 5lakh cr. LIC has assets of 57 lakh cr

Top 100 shareholders of LIC of India Dec 2024

LIC is a liquid stock .. they say only 3% public holding.. more dilution will bring the price down further... nothing could be further from the truth.. 

LIC share at current valuations is worth 10,000/- .. we can purchase it below IPO price..