India’s biggest and most awaited IPO – LIC IPO & Everything you need to KNOW.
As a financial institution for such a long time and continued to be unlisted for so long, it was considered something unthinkable when LIC decided to list on the public markets.
And LIC was always an investor and now today LIC is coming before the investors to get invested in!
This is truly a historical movement for Indian capital markets in India which is the listing of the life insurance corporation of India.
LIC IPO: All you need to know about
Life Insurance Corporation (LIC) launches the initial public offering (IPO) on April 27, 2022
- Public bidding will open on May 4 and closes on May 9, 2022.
- The state-owned insurer will be selling shares in the price band of Rs 904-949.
- The government plans to offload a 3.5% stake or 221,374,980 shares of LIC to raise Rs 21,000 crore.
- Investors can bid in a lot size of 15 shares, and multiples thereof.
- There is an employee reservation of 15lakh shares while 2.21 crore shares are reserved for policyholders.
- Retail (regular) and Employees will get a Rs 45 discount, and policyholders will get a discount of Rs 60.
- Shares will be allotted to the successful bidders on May 12.
- Shares will be credited by May 16 and
- The stock will start trading from May 17 onwards
- You can apply both as a regular and policyholder – apply twice!
| IPO Opening Date | May 4, 2022 |
| IPO Closing Date | May 9, 2022 |
| Basis of Allotment | May 12, 2022 |
| Initiation of Refunds | May 13, 2022 |
| Credit of shares to Demat | May 16, 2022 |
| IPO Listing Date | May 17, 2022 |
Objects of the issue
The IPO aims to:
- To list the equity shares on the National stock exchange & Bombay stock exchange.
- To carry out an offer for the sale of 221,374,980 shares by selling shareholders.
Lot Size I Price Band I IPO Reserve
Lot Size
| Application | Lots | Shares | Amount (Cut-off) |
|---|---|---|---|
| Minimum | 1 | 15 | ₹14,235 |
| Maximum | 14 | 210 | ₹199,290 |
Price Band
| Price Band(at discount) | Investor Category |
|---|---|
| ₹842-889(at Rs. 60 discount) | Policyholder |
| ₹857-904 (at Rs. 45 discount) | Employees & Retail |
| ₹904-949(at Rs. 45 discount) | Institutional Buyers |
| IPO Reserve |
|---|
| 10% Reserved for Policyholders |
| 35% for Retail Investors |
| 15lakh shares – employee reserved |
Promotor holding
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding | 96.50% |
LIC IPO subscription rate & GMP status
- Grey Market Price – Market observers assert that LIC shares are available in the grey market today at a premium (GMP) of ₹300/share. – ₹1142 to be traded at the listing day [Disclaimer]
| Investors Category | Subscription Rate (times) |
|---|---|
| Qualified Institutional Investor | 2.83x |
| Non-Institutional Investor | 2.91x |
| Retailed Individual Investor | 1.97x |
| Employees | 4.36x |
| Policyholders | 6.06x |
| Total | 2.94x |
LIC IN NUMBERS (Stats)
India’s largest life insurer – Life Insurance of India (LIC), has been providing life insurance for over 65 years.
- with a 61% market share in terms of premiums (or GWP)
- 61% market share in terms of New Business Premium (or NBP)
- 71% market share in terms of number of individual policies issued.
- 88% market share in terms of number of group policies issued.
It was the fifth-largest insurer globally amongst the top10 by total assets on basis of fiscal 2021.
The 2nd most valued brand across India.
Most valued brands in India, by brand value (in billion U.S dollars)
| Most valued brands in India | Brand value (in billion U.S dollars) |
|---|---|
| HDFC Bank | US$20.2 |
| LIC | US$18.2 |
Amongst the top10 in terms of global valuable brands in the insurance sector.
Brand LIC is the 3rd strongest global insurance brand with ~279mn policies being serviced and a 1.33mn agents network.
- It has the largest individual agency network more than 7.5 times its closest competitor.
LIC issued approximately 21mn individual policies in India in FY21, representing approximately 75% market share in new individual policy insurance. (Source: the CRISIL Report)
LIC has an AUM of Rs. 40,122bn (US$540.0bn), which is 1.1x of the entire Indian mutual fund industry AUM.
This is the largest IPO in Indian capital markets history.
| LIC – THE GIANT |
|---|
| ~ 28.62 Crore Policies |
| ~ 38.04 Lakh Crore Assets |
| ~ 121 Zonal & Divisional Offices |
| ~ 2048 Branch Offices |
| ~ 1546 Satellite Offices/Sub-Branches |
| ~ 1.08 Lakh Employees |
| ~ 13.53 Lakh Agents |
| ~ 75.90% – Market Share |
Financials OF LIC IPO
| 31-Dec-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
| Total Assets | 40,907,867.78 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 |
| Profit After Tax | 17,151.12 | 29,741.39 | 27,104.78 | 26,272.78 |
- For the year/period ended (₹ in millions)
LIC IPO – Apply or avoid?
- LIC looks very good in terms of valuation than its peers.
- By cutting down the valuation of LIC, the Indian government has made LIC IPO very attractive.
Very Low downward risk from current valuation
- From a Risk/Reward perspective, LIC looks very attractive
| Retail investors discount | ₹45 |
| policyholder discount | ₹60 |
- If you are someone just looking for quick profits then we can’t suggest much, but if you are someone who is a long-term investor then you can consider investing in LIC IPO for long-term wealth creation.
LIC is a portfolio stock for long-term holding but, don’t consider it if you are looking for short-term listing gains. – I would consider applying for the IPO if I were you!
Disclaimer!
"ONLY FOR INFORMATION AND EDUCATION PURPOSE, PLEASE DO YOUR MARKET RESEARCH OR CONSULT YOUR ADVISOR BEFORE INVESTING"
Now we’d like to hear from you:
LIC IPO – Apply or Avoid?
If you have any comments, please leave them below right now!
Check IPO allotment details: https://ris.kfintech.com/ipostatus
Invested lic ipo in policy holder category, Can I apply again in retail category!?
Yes Abdul, investors can apply for both retail and policyholders category (with a limit of Rs 2 lakh in each category).
Retail discount: Rs 45
Policyholder discount : Rs 60
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