Government to receive Rs 3,662 crore dividend as LIC’s Largest shareholder

The Government of India is set to receive Rs 3,662 crore as a dividend for being the largest shareholder of Life Insurance Corporation (LIC) of India. This announcement comes following LIC’s declaration of an interim dividend of Rs 6 per share on May 27.

As the primary shareholder, the government holds a substantial 96.5 percent stake in LIC, amounting to 6,10,36,22,781 shares.

For the March quarter of the financial year 2023-24, LIC reported a 2.5 percent year-on-year increase in net profit, reaching Rs 13,762 crore, up from Rs 13,421 crore in the same period the previous year. LIC noted an improvement in asset quality for the final quarter of FY24, alongside the announcement of the interim dividend.

The insurer’s gross non-performing asset (GNPA) ratio improved to 2.01 percent, down from 2.56 percent in the year-ago period. Additionally, the value of new business (VNB) rose by 4.66 percent to Rs 9,583 crore, with the VNB margin increasing by 60 basis points to 16.8 percent.

Significant growth was seen in the non-par Annualized Premium Equivalent (APE) share within the individual business, which increased by 9.43 percent to 18.32 percent. The Non-Par APE grew from Rs 3,436 crore for the year ending March 31, 2023, to Rs 7,041 crore for the year ending March 31, 2024, marking a growth of 105 percent. Consequently, the non-par share of individual business on an APE basis increased from 8.89 percent in FY23 to 18 percent in FY24.

In terms of policy sales, LIC sold a total of 2.03 crore policies in the individual segment, slightly down from 2.04 crore policies in FY23. However, the assets under management (AUM) saw a significant rise, reaching Rs 51.21 lakh crore as of March 2024, compared to Rs 43.97 lakh crore on March 31, 2023, reflecting a 16.48 percent year-on-year increase.

The insurer’s solvency ratio also improved to 1.98 percent, up from 1.87 percent in the previous year.