Rs 6/Share Dividend: Insurance Giant LIC To Pay Rs 3,662 Crore Dividend To Govt After Q4 Results

In India's financial markets, the spotlight again shifts on the Life Insurance Corporation of India (LIC) as it announces its fourth-quarter results, showcasing a blend of steady growth and minor share adjustments.

As the trading day unfolded on Tuesday (May 28), LIC's shares were noted to be trading with marginal cuts of 0.6%, settling at Rs 1,029.80 per share during the early session. This movement followed the much-anticipated announcement of the insurance giant's fourth-quarter performance, accompanied by a dividend declaration, on Monday (May 27).

LIC reported a 2.5% year-on-year increase in net profit, reaching Rs 13,762 crore for the March quarter of the financial year 2023-24, compared to Rs 13,421 crore in the corresponding period last year. The company also highlighted an improvement in its asset quality during the final quarter of FY24, with gross non-performing assets (GNPA) reducing to 2.01% from 2.56% in the preceding year.

Furthermore, LIC's value of new business (VNB) witnessed a healthy uptick, rising by 4.66% to Rs 9,583 crore, with VNB margin expanding by 60 basis points to 16.8%. Particularly notable was the robust growth in the non-par Annualized Premium Equivalent (APE) share within the individual business, soaring by 105% year-on-year.

However, amidst these positive indicators, LIC experienced a slight dip in the number of policies sold in the individual segments, with 2.03 crore policies compared to 2.04 crore in the previous fiscal year. Nevertheless, the insurer's assets under management (AUM) registered a significant surge, reaching Rs 51.21 lakh crore by March 2024, reflecting a notable 16.48% year-on-year increase.

LIC's solvency ratio also displayed resilience, standing at 1.98% against 1.87% in the preceding year, reaffirming the insurer's robust financial position. The company announced a final dividend of Rs 6 per equity share for the financial year 2024.

The Government of India, as LIC's largest stakeholder with 96.5% ownership, stands to receive a dividend payout of Rs 3,662 crore. This dividend distribution follows the insurer's earlier declaration of an interim dividend of Rs 6 per share, bringing the total dividend per share for the year to Rs 10. The record date for the final dividend has been set for July 19.

Notably, LIC's journey into the public domain in May 2022 has been marked by a progressive dividend policy, with payouts increasing significantly each fiscal year. In FY24 alone, LIC's dividend payout amounted to Rs 6,104 crore for the government.

Reflecting on the broader market dynamics, LIC continues to maintain its stronghold in the Indian life insurance sector, boasting an impressive overall market share of 58.9%. For the financial year 2024, LIC commanded market shares of 38.4% in the individual business segment and 72.3% in the Group business category.

Moreover, investors have shown renewed confidence in LIC, with its shares rallying by 71.5% during fiscal 2024, contributing Rs 2.4 lakh crore to its market capitalization. As the second-largest PSU after the State Bank of India, LIC now commands a market valuation of Rs 6.6 lakh crore.

LIC's fourth-quarter performance shows the country's largest insurance provider's growth trajectory amidst evolving market conditions, while its dividend policy reflects a commitment to delivering value to its shareholders and the broader economy.