LIC Says Determination of Embedded Value in Progress, May Announce by July 15

LIC Embedded Value: The insurance behemoth, Life Insurance Corporation (LIC) of India, said the exercise of determining its embedded value as of March 2022 is on’ and is likely to be completed by July 15. It informed that the exercise of determining the Indian Embedded Value (IEV) as on March 31, 2022, may take some more time to get completed.

In its update on stock exchanges today, LIC said, “it is informed that the exercise of determining the Indian Embedded Value (IEV) as of March 31, 2022, may take some more time to get completed.”

“Once completed and after requisite approvals, the required public disclosures of the same, will be made in this regard,” LIC added.

The Embedded Value (EV) is a measure of the consolidated value of shareholders’ interest in the life insurance business. It represents the worth of shareholders’ interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks in the business.

LIC’s embedded value was pegged at about Rs 5.4 lakh crore as on September 30, 2021, by international actuarial firm Milliman Advisors.

Since its listing in May this year, investors and analysts have been keen to get more updated data on its embedded value. LIC had previously said it would disclose its embedded value on a regular basis. Typically insurance companies disclose it twice a year.

LIC Share: Correction in Stock Price

The sharp correction in the share prices of LIC (Life Insurance Corporation of India) post its discounted listing on May 17 has dealt a major blow to its investors as the market capitalisation of the state-run insurer has come down drastically.

According to equity market analysts, while this sharp decline is a big disappointment, investors should remain patient as the stock may stage a comeback.

VK Vijayakumar, chief investment strategist at Geojit Financial Services said that LIC stock’s performance post IPO has been a big disappointment. He, however, says that it is too early to conclude that the share price won’t reach the IPO price in the next one year. If the Q1FY23 results of LIC are good, the stock may stage a comeback but it is likely to underperform if there is a rally in the market.”

LIC Financials

LIC reported a net profit of Rs 2,409 crore for the quarter ending March 2022, which was 17.41 per cent lower as compared to Rs 2,917.33 crore reported in the year-ago period. The company’s net profit for the entire fiscal was reported as Rs 4,043.12 crore, which was 39.4 per cent higher as compared to Rs 2,900.56 crore in FY21.

The total revenue in Q4 FY22 came in at Rs 2,11,471 crore, which was 11.64 per cent higher as compared to Rs 1,89,176 crore-revenue reported in the corresponding quarter last year.

Shares of the life insurer were trading 0.51 per cent lower at Rs 675.9 apiece on BSE at 10:55 am.

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