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LICI: Government Stake Sale Plans And Bonus Share Proposal Will Shape Fair Pricing

India's Legacy Insurer Will Suffer Digital Disruption Yet Pursue Reforms

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LICI
AnalystLowTarget
Not Invested
Published 08 Jun 2025
30 viewsusers have viewed this narrative update

Update shared on 12 Apr 2026

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AnalystLowTarget's Fair Value
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1Y
-6.8%
7D
-0.4%

Analysts are keeping the price target for Life Insurance Corporation of India steady at ₹850.00. This reflects changed assumptions that now pair projected revenue growth of about 10.60% with a profit margin of about 4.67% and a lower future P/E estimate of about 18.19x.

What's in the News

  • Board meeting scheduled for April 13, 2026 to consider and recommend a proposal for issuing bonus shares, subject to shareholder approval and applicable regulations (Board Meeting).
  • Government considering a further reduction of its 96.5% stake in LIC through a follow on public offering, with officials indicating the offer may be targeted for the next financial year if approvals and market conditions align (Potential Privatization of Government Entities).
  • The government previously sold a 3.5% stake in LIC through the May 2022 IPO at a price band of ₹902 to ₹949 per share, raising about ₹210b (Potential Privatization of Government Entities).
  • The government is required to reduce its holding by another 6.5% to meet the mandated 10% public shareholding requirement by May 2027, with the final stake size, pricing and timing to be decided later (Potential Privatization of Government Entities).
  • Board meeting on February 5, 2026 to consider and approve unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025 (Board Meeting).

Valuation Changes

  • Fair Value: The fair value estimate is kept unchanged at ₹850.00.
  • Discount Rate: The discount rate assumption remains steady at 12.48%.
  • Revenue Growth: The revenue growth outlook changes from a 5.92% decline to a 10.60% growth assumption.
  • Net Profit Margin: The net profit margin assumption is adjusted from about 6.31% to about 4.67%.
  • Future P/E: The future P/E multiple is reduced from about 21.87x to about 18.19x.

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