Life Insurance Corporation of India (LIC) MD & CEO R Doraiswamy has expressed disappointment over the insurer’s stock market performance since its listing, saying the company’s valuation does not reflect its size and stature. He attributed the subdued investor sentiment to the discount typically associated with public sector companies, limited public shareholding and uncertainty over further government stake sales.
“It really upsets me that a company of LIC’s size and stature has not delivered better returns to investors since listing,” Doraiswamy said in an exclusive interview with Moneycontrol.
LIC shares have lost more than half their value from the initial public offering (IPO) price of ₹949 in May 2022. The stock was listed at ₹876.20 and closed at around ₹397 on November 8, 2026, reflecting the valuation challenges facing the country’s largest insurer.
Doraiswamy said LIC’s initial public float of 3.5% had constrained the availability of shares in the market. The company’s public sector identity and the possibility of further government stake sales had also weighed on its valuation.
“Being a public sector company comes with a valuation discount. The limited public float and the uncertainty around further government stake sales have also weighed on the stock,” he said.
The government’s subsequent offer for sale (OFS), which raised LIC’s public shareholding to 10%, has addressed a significant part of the concerns around additional share supply, Doraiswamy said. He added that the insurer had also sought to assure investors that there would be no immediate further dilution through another issue or OFS.
LIC has taken additional steps to improve shareholder returns, including increasing its dividend and announcing a bonus issue. Doraiswamy said the company hoped these measures would help the market reassess its valuation.
“We expect the market to recognise these steps and reassess LIC’s valuation. We are hopeful of seeing an improvement in the stock’s valuation in the coming days,” he said.
He added that meeting the minimum public shareholding requirement of 25% could further improve investor confidence.
Also read: Sensex, Nifty end higher: 3 reasons why PSU banks, defence stocks rallied today
LIC AUM growth moderates amid market volatility
On the investment front, Doraiswamy said market volatility since February 28 had moderated LIC’s assets under management (AUM) growth, although the insurer had not changed its long-term investment strategy.
LIC’s AUM rose 5.08% to ₹57.29 lakh crore as of the second quarter of FY27. This compares with growth of 6.45% in each of the previous two financial years. Doraiswamy said market gains had not translated into a corresponding increase in the value of the insurer’s portfolio.
“LIC is a long-term investor. Our investment decisions are based on the fundamentals of companies and the long-term value of the instruments we invest in,” he said.
He explained that LIC’s asset allocation is closely linked to the nature of its insurance products and the returns committed to policyholders. Participating (par) policies provide greater flexibility to invest in equities, while non-participating (non-par) products, which offer guaranteed benefits, require a larger allocation to fixed-income securities.
“The participating business gives us greater flexibility to invest in equities. In contrast, non-participating products, where benefits are guaranteed, require a larger allocation to fixed-income securities,” he said.
LIC also uses interest-rate derivatives to hedge its fixed-income portfolio, he added.
Also read: NSE shares have a 54% ‘bull case’ upside as per Motilal Oswal, who recommends ‘buy’
Market correction opens up investment opportunities for LIC
Doraiswamy said the recent correction in equity markets had brought down valuations across sectors, but LIC had largely maintained its market positions while looking for opportunities to book profits as conditions improve.
The insurer continues to sell investments when necessary to meet payouts on maturing policies and ensure that the corresponding asset share is available to policyholders. Some of these transactions have also enabled LIC to realise profits, he said.
“We may sell some investments when policies mature and we need to realise the corresponding asset share to meet payouts. We have also been able to book profits from some of these sales,” he said.
Beyond these requirements, LIC has largely remained invested in equities, with a focus on long-term value creation.
The market correction has also created opportunities across equity and debt markets, according to Doraiswamy. Lower stock valuations have provided entry opportunities in equities, while rising bond yields have allowed the insurer to secure attractive long-term returns.
LIC has been particularly assessing opportunities in state government securities and government securities (G-secs), where yields have risen in recent months.
“The correction has created opportunities in equities at lower valuations. At the same time, the rise in yields on fixed-income instruments, particularly state government securities and G-secs, has allowed us to lock in attractive long-term returns,” he said.
Doraiswamy said LIC would continue to evaluate opportunities across both asset classes while retaining its position as a strategic, long-term investor.