India’s largest insurer LIC plans changes to revive battered stock | Business News,The Indian Express
The company plans to transfer 1.8 trillion Indian rupees ($21.83 billion), a sixth of the 11.57 trillion rupees lying in its non-participating fund, to its shareholders' fund, according to an official aware of the matter.
The state-owned insurer listed on Indian stock exchanges in May, but its stock has since dropped by more than 35%, wiping off nearly 2.23 trillion Indian rupees in investor wealth.
LIC is now looking to looking at steps to revive its share price, said a government official, who did not want to be named.
The company plans to transfer 1.8 trillion Indian rupees ($21.83 billion), a sixth of the 11.57 trillion rupees lying in its non-participating fund, to its shareholders’ fund, according to an official aware of the matter.
Life insurance companies primarily sell two types of products: the first are ‘participating policies’ where profits are shared with customers and second are ‘non-participating,’ or ‘non-par,’ policies that have fixed returns. LIC parks the premium it collects from the latter in a non-participating fund.
Transferring some of that into the shareholders’ fund is one way to shore up investor confidence as it would be an indicator of higher dividend payouts in the future, both the officials said.
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