Life Insurance Corporation of India (LIC) has achieved a notable milestone by surpassing State Bank of India (SBI) to become the most valuable public sector undertaking (PSU) listed on Indian stock exchanges. According to the latest market data, LIC’s market capitalization has crossed Rs. 5.75 lakh crore to supersede SBI as the top PSU by valuation. 

LIC Ascends to the Top

LIC’s upward trajectory has gained momentum recently on the back of an impressive stock rally. The insurance behemoth’s shares witnessed gains of over 9% in the past week alone, breaching the Rs. 900 mark for the first time ever. This surge has been powered by a string of positive developments for the 61-year old state-owned firm entering the public markets.

A key trigger was the exemption provided by the government last month from mandatory minimum public shareholding norms until 2032. This relaxation reduces pressure on LIC to dilute significant stake through stock offerings in the immediate future. It assuages investor concerns around abrupt share supply that could potentially dampen the ongoing price momentum.

Another boost came through ratings upgrades by leading brokerage firms focused on LIC’s attractive valuation and prospects of growth recovery. Emkay Global noted LIC’s price-to-embedded value is now at the lower end of global life insurance averages. It sees scope for the company’s dynamism and profitability to revive next fiscal as macroeconomic headwinds stabilize. 

The market has clearly warmed up to LIC’s long-term investment case post its mega-IPO debut earlier this year. While structural challenges around high costs and volatility in business revenues persist, markets are pricing in expectations of improving fundamentals backed by LIC’s financial strength, extensive pan-India distribution network and ongoing diversification into new products and service lines.

With its latest share buybacks increasing LIC’s market worth beyond Rs. 5.75 lakh crore, it has exceeded SBI’s valuation of around Rs. 5.65 lakh crore to emerge as the most valuable PSU listed entity. This milestone achievement puts LIC in the spotlight as a potential key driver of gainswithin the domestic BSE PSU index. Its assured prominence will also raise stakes for the government’s strategic disinvestment program going forward.

While macroeconomic headwinds persist, LIC’s ascendancy to the pole position underlines growing faith in its business franchise and reform measures underway. If it can continue enhancing operational performance and capitalize on growth levers, the insurance leader is well poised for a new era of visibility and shareholder returns as an icon of India’s public markets.