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LIC shares rise 3% as Motilal Oswal sees 20% upside

LIC shares rise 3% as Motilal Oswal sees 20% upside

LIC stock gained 2.78% to Rs 711.75 in the current session against the previous close of Rs 692.50 on BSE.

Motilal Oswal assigned a buy call to the LIC stock with a target price of Rs 830, 20 per cent higher to the previous close of Rs 692.50 on BSE. Motilal Oswal assigned a buy call to the LIC stock with a target price of Rs 830, 20 per cent higher to the previous close of Rs 692.50 on BSE.

Shares of Life Insurance Corporation (LIC) of India gained nearly 3 per cent in early trade today after financial services firm Motilal Oswal initiated coverage on the insurance major. Motilal Oswal assigned a buy call to the LIC stock with a target price of Rs 830, 20 per cent higher than the previous close of Rs 692.50 on BSE.

LIC stock gained 2.78 per cent to Rs 711.75 against the previous close of Rs 692.50.

Shares of LIC opened higher at Rs 697.90 on BSE. The stock has fallen 18 per cent or Rs 155 since May 17 this year when the stock made a tepid debut on the bourses.

In the current session, the market cap of the firm rose to Rs 4.47 lakh crore on BSE. Total 1.34 lakh shares of the firm changed hands amounting to a turnover of Rs 9.45 crore.

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Motilal Oswal said, "We estimate LIC to deliver 10 per cent CAGR in New Business Premium during FY22-24E while the value of New Business (VNB) margin is likely to improve to 13.6 per cent on improving product mix and higher profit retention. We initiate coverage on the stock with a BUY rating and a TP of Rs 830 based on 0.8 times FY24E EV."

However, Motilal Oswal said it saw key downside risks to the business of the firm. They include a slow ramp up of individual protection and non-par savings, low share and productivity of banca channel and a sharp correction in equity markets.

The firm made a tepid market debut on May 17 this year amid high volatility in the market. LIC stock listed at a discount of 8.62 per cent against the IPO issue price. The company offered its shares in a price band of Rs 902- Rs 949. The stock listed at Rs 867.20 on BSE.

On NSE, the stock is listed at Rs 872, 8.11 per cent lower than the IPO price. Meanwhile, the company said its first Annual General Meeting of the Corporation would be held on September, 27, 2022 at 14:30 hrs and the mode of convening the meeting would be Video Conference / Other Audio-Visual Means.

The record date for dividend payment will be August 26, 2022.

Board of the firm has approved investing in the proposed Rights issue of LIC (Nepal) Ltd worth NPR 127.07 Cr (INR 80.67 Crore) approximately subject to the prevalent exchange rate) for infusing capital in LIC (Nepal) Ltd.