Life Insurance Corporation of India (LIC) share price jumped 3.72% to Rs 615.65 today after the insurance behemoth reported a more than five-fold jump in consolidated net profit to Rs 13,191 crore for the fourth quarter ended March 2023. LIC IPO was the largest ever public issue in India with an issue size of Rs 21,000 crore. Investors had high hopes from IPO, but LIC stock’s downfall started with its debut. LIC stock listed with an 8% discount at Rs 865 on May 17, 2022. Over one year has passed since then and the stock is still down 35% from the IPO price of Rs 949 per share.
Despite strong quarterly results, the pressure still remains on the stock as Finance Minister Nirmala Sitharaman in the Union Budget this February provided a higher impetus for individuals to shift to the new tax regime, which does not favour tax exemptions on investments in insurance schemes. The proposal has come as a big blow to the insurance sector and has caused investors to reconsider its growth prospects, forcing them to stay side-lined.