LIC Share Price Declines 3% Following GST Demand Order Worth Rs 57 Crore

Life Insurance Corporation of India (LIC) saw its share price decline on Tuesday, February 25, 2025, following news of a Goods & Service Tax (GST) demand order. The stock fell by as much as 2.51%, hitting an intraday low of Rs 756.35, bringing it close to its 52-week low of Rs 745.15.

The slump in LIC’s stock price was triggered by an announcement from the company stating that it had received a demand order concerning GST, interest, and penalties amounting to approximately Rs 57.28 crore for the Delhi region.

Details of the GST Demand Order

In an official filing with the stock exchanges, LIC disclosed the tax demand, stating:

“This is to inform you that the Life Insurance Corporation of India has received a communication/ demand order for Goods & Service Tax, Interest and penalty for Delhi State.”

The GST demand pertains to the financial year 2020-21 and consists of the following:

• GST: Rs 31,04,35,201

• Interest: Rs 23,13,21,002

• Penalty: Rs 3,10,43,519

Despite this, Life Insurance Corporation of India (LIC) reassured stakeholders that the order is appealable before the Commissioner (Appeals), Delhi.

LIC Clarifies Financial Impact

LIC has addressed concerns about the financial implications of this demand, stating:

“The financial impact of the demand is to the extent of the GST, Interest and Penalty. There is no material impact on financials, operations or other activities of the Corporation.”

This suggests that while the amount involved is significant, it is not expected to disrupt the company’s overall financial health or operations.

LIC’s Q3 Financial Performance

Despite the latest regulatory setback, LIC has reported strong financial performance for the third quarter (Q3) of FY25.

• The company posted a 17% year-on-year (Y-o-Y) increase in net profit, reaching Rs 11,056.5 crore for the October-December quarter.

• A significant 20.8% decline in expenses contributed to the profit boost, with total expenses dropping to Rs 14,415.8 crore.

• Employee-related expenses witnessed a steep decline of nearly 30%, further aiding cost efficiency.

• The expense management ratio stood at 13.5%, compared to 15.5% in the same period the previous year.

About LIC: India’s Largest Life Insurer

The Life Insurance Corporation of India (LIC) is the country’s largest and most trusted public sector insurance provider, wholly owned by the Government of India. Established in 1956, LIC was formed through the merger of 154 Indian life insurance companies, 16 foreign firms, and 75 provident societies.

LIC’s Insurance Offerings

LIC provides a wide range of insurance products, including:

• Endowment Plans

• Money-back Policies

• Term Insurance

• Pension Plans

• Unit-linked Insurance Plans (ULIPs)

• Group Insurance Schemes

• Child Insurance Policies

• Health Insurance

Additionally, LIC offers policy loans and operates a 24/7 customer support centre available in English, Hindi, and eight regional languages.

LIC’s Market Presence

• LIC’s market capitalization stands at Rs 4,81,743 crore, making it one of the largest companies in India.

• The company is listed in the BSE 200 index, solidifying its position among top-tier Indian businesses.

LIC Share Price Movement and Market Trends

As of 11:23 AM on February 25, 2025, LIC’s stock was trading 1.86% lower at Rs 761.50 per share, while the BSE Sensex was up 0.21% at 74,612.57 levels.

Conclusion

The decline in LIC's share price following the GST demand order highlights the impact of regulatory developments on investor sentiment. However, LIC's robust Q3 results and strong financial fundamentals suggest that the company remains well-positioned to navigate these challenges. As the appeal process unfolds, investors will closely monitor further updates regarding the tax dispute. Given LIC’s dominant market presence and continued profitability, the company’s long-term growth outlook remains promising.