LIC Shares Rise 3% After Strong Q1 Profit Growth, ₹32,000 Crore OFS in Focus

Life Insurance Corporation of India (LIC) rose more than 3% on August 11 after the stock held above a key technical level despite the government’s mega ₹32,000-crore offer for sale (OFS). Strong first-quarter results also provided support to the stock. LIC reported a 23% year-on-year increase in net profit to ₹13,492 crore for the quarter ended June 30, compared with ₹10,987 crore in the year-ago period. The growth was driven by strong performance in the group business and an improvement in margins, aided by the insurer’s increasing focus on more profitable products. Analysts had expected LIC to post a healthy quarter, supported by steady demand for traditional life insurance following tax-related changes introduced late last year. However, competition in the sector has intensified as private insurers have increased their focus on more profitable non-participating policies, which do not offer policyholders bonuses or dividends. LIC benefited from a favourable base effect, continued momentum in its group insurance business and a strategic shift towards non-participating products. Its net premium income rose nearly 7% year-on-year to ₹1.27 lakh crore during the quarter, while first-year premiums from new policies increased 22%. As India’s largest life insurer, LIC is well positioned to benefit from the country’s growing financial awareness and relatively low insurance penetration. The market offers significant room for long-term expansion, with India expected to become the fastest-growing major life insurance market. According to an Allianz research report published in May, life insurance premiums in India are projected to grow at an annual rate of 10.5% through 2036, potentially enabling the country to overtake Japan as Asia’s second-largest life insurance market.