LIC IPO is most awaited ipo in India Life Insurance Corporation (LIC) is the largest insurance provider corporation in India. Likely 66.4 % market in new business premium in India. Indian government announces the LIC IPO issue this year.
The company offered to participate in insurance and non-participating insurance products.
Ex. Unit-based insurance products, saving insurance, term insurance, health insurance, and pension products.
LIC IPO Overview
The initial public offer of shares up to 5 percent share against 31.62 Crore equity shares net offer of the total share capital 632.49 Crore.
The government retains the remaining 95 percent share capital.
Employee reservation and policyholder reservation portion are included in that 5 pet sent of sell the stake.
The Embedded Value has been pegged at approximately Rs 5.4 lakh crore, which is a measure of the consolidated shareholder value of LIC until September 2021. According to the draft red herring prospectus (DRHP).
DRHP is not disclosing the market value of LIC as per industry standards. But as per the PTI report, the LIC market value is three times bigger than the embedded value which is around Rs 16 lakh crore approximately.
In their, LIC has calculated earnings per share of Rs 4.7and return on the net worth of 45.65 percent for the ended March 2021 as fiscal.
what is insurance? Important and type-2021
IPO date and detail
The government announced March 2022, but the government postponed the LIC IPO because of Russia and Ukraine war situation.
The government has not announced yet a new date for the issue, but likely the IPO comes on this year only.
| LIC IPO Opening Date | Likely announced 2022 |
| LIC IPO Last Date | to be announced soon |
| Issue Type | Book Built Issue Initial Public Offering |
| Face Value | ₹10 per Equity Share |
| LIC IPO Price | Expected between ₹1500 to ₹3200 per share |
| Issue Size and Offer for Sale | 316,249,885 Equity Shares of ₹10 each |
| Listing at | BSE and NSE |
| Market Lot Size | to be announced soon |
| LIC IPO Allotment Date | to be announced |
| Reservation Benefits | Employees of LIC and LIC Policyholders |
Current shareholders of LIC
Apply who have reservations and discounts
In the issue of shares, 5 percent of the offer, is reserved for employees. Another 10 percent, will be reserved for eligible policyholders.
Likely get shares at a discount for policyholders and employees. While LIC has not disclosed detail.
But a 5 percent discount is expected.
A minimum of 35 percent of the issue will be reserved for retail investors and up to 60 percent allocate the qualified institutional buyers (QIB).
In that 60 percent of the share issue, one-third of the anchor investor will be reserved for domestic mutual funds.
Positive factors
• LIC has more than 13.5 lakh agents who play and bring in most of the new business. LIC’s plans offer ‘fixed returns’ along with life insurance coverage. This makes sales easier by agents and gives insurers peace of mind.
• LIC has a lot of public trust in both life insurance as well as the investments made with them. LIC is synonymous with insurance in India.
• LIC manages assets worth Rs 39 lakh crore. That’s more money than the entire mutual fund industry. They invest these funds in stocks and bonds. They own 4% of all listed stocks in India and government bonds more than RBI.
• LIC is an insurance and investment products company. Their plan is a combination of insurance and investment with guaranteed returns.
• Leading insurance provider in India and fifth largest global insurer by GWP.
• A range of life insurance products to meet the various insurance needs of individuals.
challenges
• LIC’s new policy growth is bad as they are losing market share to private insurance companies, especially in urban areas.
• Margins are low in insurance + investment products.
• It is very difficult to give importance to LIC as the business model is not unlike any other company. LIC first deposits the money and later promises to compensate the policyholders. The premiums they collect (partial insurance and partial investment) cannot be recognized as revenue.
Company Promoters
The President of India, acting through the Ministry of Finance, Government of India is the company promoter.
Company Financials
| Summary of financial Information (Restated Consolidated) | |||||
| Particulars | For the year/period ended (₹ in Millions) | ||||
| 30-Sep-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | ||
| Total Assets | 40,434,596.70 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 | |
| Total Revenue | 15,197.24 | 29,855.71 | 27,309.56 | 26,449.96 | |
| Profit After Tax | 15,040.13 | 29,741.39 | 27,104.78 | 26,273.78 |