PSU general insurance companies jump up to 19% today; stocks hit new 52-week high

Shares of General Insurance Corporation of India Ltd,  The New India Assurance Company Ltd and Life Insurance Corporation of India Ltd were at the focus of investors on Friday as the stocks of state-run general insurers gained up to 19 per cent during the early sessions as investors rushed to lap up PSU counters. Amid the euphoria, The New India Assurance Company Ltd (NIACL) surged more than 19 per cent to Rs 207.75 for the day, its new 52-week high, commanding a total market capitalization of more than 34,000 crore. The scrip had settled at Rs 174.50 in the previous trading session on Thursday. The stock has delivered a return of more than 120 per cent from its 52-week low at Rs 94.15 hit in March 2023. The stock has surged about 60 per cent in the year 2023, while it is up 75 per cent in the last six-months period. The stock is up 50 per cent in the last one month. The company is scheduled to hold an investor and analyst meeting on Wednesday, November 2023 to discuss the company’s financial performance in the September 2023 quarter and first half of the ongoing fiscal year. The company informed about the same through an exchange filing with the bourses. Earlier this month, NIACL shared its investors presentation where the company assured about its strong position in the market, increasing the penetration, growth prospects and technological advancement to affirm its position as the largest general insurance company in India. Similarly, shares of General Insurance Corporation of India (GIC-Re) soared about 18 per cent to Rs 301.90 on Friday, its new record highs with a total market capitalization of more than 53,000 crore. The scrip had settled at Rs 263.55 in the previous trading session. The state-run reinsurance company had surged more than 135 per cent from its 52-week low at Rs 127.80, scaled in March 2023. The stock has gained about 60 per cent in the year 2023 so far, while the stock is up 75 per cent in the last six-months period. The stock is up 35 per cent in a month. AM Best re-affirmed the existing ratings and additionally assigned India National Scale Rating (NSR) to the General Insurance Corporation of India, said the company in its exchange filing on Thursday. The outlook on financial strength, long-term issuer credit rating and India National Scale Rating remained stable and positive. Another state run behemoth, Life Insurance Corporation of India (LIC) jumped more than 9 per cent to Rs 674.80 during the day, with a total market capitalization of more than Rs 4.30 lakh crore. However, the stock has remained in year on a year-to-date (YTD) basis. According to market expectations, public Sector insurers are in thick demand among traders amid the catch up rally with the private insurance players due to their compelling valuations versus private players. Private players were rallying higher in the recent weeks lately.  

The non-life insurance industry reported moderate growth due to the motor business’s muted growth. Despite strong festive season sales, headwinds of lower renewals and high competitive intensity led to muted growth for the motor business, said Kotak Institutional Equities in its recent report.

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