India’s Largest Insurance company with over 61.6% market share is offering its IPO, opening on 4th May and closing on 9th May 2022. As per the reports, the LIC IPO is finalized to raise an issue of Rs ₹21,008.48 crores. With this IPO, the government-owned company is keen on taking a valuation close to Rs 6 Lakh crores. As of 30 Sep 2021, it has a total AUM of Rs. 39 lakh crore. LIC operates through 2048 branches, 113 divisional offices, and 1,554 Satellite Offices. It operates globally in Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom. LIC offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.
At least 5 domestic mutual funds managed by SBI, Aditya Birla, ICICI Prudential, HDFC and Kotak have committed Rs.150 to 1000 crore investment in the IPO. The grey market premium is on the rise for the last three days.
IPO Details
Opening Date 04th May 2022 Closing Date 09th May 2022 Face Value ₹10 per equity share IPO Price Band ₹902 to ₹949 per equity share Minimum Order Quantity 15 Issue Size Rs ₹21,008.48 Crores Retail & Employee Discount : ₹45/share Policyholders Discount : ₹60/share |
Objectives of LIC IPO
According to the DRHP filed with SEBI, LIC has proposed underlying objectives for its IPO
Achieve the benefits of listing the Equity Shares on the Stock Exchanges.
Carry out the Offer for Sale of up to 221,374,920 Equity Shares by the Selling Shareholder.
Company Financials
LIC IPO Analysis
Strengths
India’s Largest and Worlds 5th Largest based on Gross written premium (GWP)
Wide Distribution of Network with over 13.3 lakhs LIC Agents
Great Brand Name and Brand Value
Challenges
Yet to leverage the Digital medium, most of its business comes from its Agents
New Business Premium (NBP)Increased for LIC by 13.5% whereas its competitors recorded an increase of 16% to 22%
Value of New Business Margin (VNB) is 25% for private players whereas for LIC it stands at 9.3%
LIC will continue to attract retail and institutional investment considering the penetration of Insurance products in India. Most of the gains could be in long term.