The government-owned insurance company, LIC, has once again made a significant contribution to the government treasury. This time, LIC paid over ₹3,662 crore as a dividend to the government. The dividend check was handed over to Finance Minister Nirmala Sitharaman.
Government’s Stake in LIC
The Indian government is the largest shareholder in LIC. Out of 632.49 crore fully paid-up equity shares of LIC, the government owns 610.36 crore shares. This means that the government holds a 96.50% stake in LIC. Initially, the government had a 100% stake, but some of it was diluted during the IPO.
All companies share a portion of their profits with shareholders as dividends. LIC decided to distribute a part of its profits as dividends, with the government, being the largest shareholder, receiving the biggest payment.
Total Dividend Payment Exceeds ₹6,100 Crore
This recent dividend payment was approved during LIC’s annual general meeting (AGM) held on August 22. The company had announced in May that it would pay a final dividend of ₹6 per share for the last financial year. Before this, on March 1, 2024, LIC paid an interim dividend of ₹2,441.45 crore to the government. Thus, for the last financial year, LIC’s total dividend contribution to the government treasury exceeded ₹6,100 crore.
See here also: https://timesofkashi.in/reliance-esop-mukesh-ambanis-retail-company-rewards-employees-with-%e2%82%b9351-crore-in-shares/
LIC Stock Performance
LIC’s IPO was launched in May 2022 with a price band of ₹902 to ₹949. The IPO received a good response, but the stock listed at a lower price of ₹867. The share price even dropped below ₹600 at one point. However, during the last financial year’s strong rally in government stocks, LIC’s share price rose above the IPO level. Currently, LIC’s shares are trading at ₹1,071, though there was a 1.24% drop in price on Thursday.
