10 Things to know before investing in LIC IPO

10 Things to know before investing in LIC IPO

by Shreya Anaokar Last Updated: Dec 10, 2022 - 04:23 pm 36k Views

Before investing in LIC IPO here are some Important Points Every Investor should know:

1) Finance Minister of India, Ms. Nirmala Sitharaman, first announced the disinvestment of equity in LIC in the Union Budget 2020.

2) An amendment has been made in the LIC Act, 1956 to facilitate the roll-out of IPO. The amendment indicates that LIC will become a listed company and prepare quarterly and yearly earnings reports and balance sheets. Moreover, any developments within the company will have to be made public post the IPO.

3) The purpose of LIC IPO is to ensure more discipline, transparency in the company’s operations and give retail investors an opportunity to invest in the company

4) A public offering doesn’t mean LIC’s privatisation. 

5) Global investors including BlackRock and Blackstone have shown interest in the anchor issue of the LIC IPO.

6) Mr. Arjit Basu, the former MD of State Bank of India and former MD and CEO of SBI Life Insurance, has been appointed as a Consultant to help with the launch. Deloitte and SBI Capital will be one of the Pre-IPO Advisors.

7) Milliman Advisor LLP India, an actuarial firm is in incharge of calculating the embedded value of the Company.

8) Out of 18 banks, including domestic and international, only 10 were selected to manage LIC IPO which were chosen based on their knowledge of Life insurance, marketing strategies, and their experience in retail and international distribution.

9) LIC is keeping 35% of the offering  aside i.e approx 11.1 Crore shares for Retail Investors.

10) LIC  may allocate upto 60% QIB (Qualified Institutional Buyers) portion to Anchor investors on a discretionary basis. One-third of the anchor investors part will be reserved for Domestic Mutual Funds.

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About the Author

Shreya Anaokar is a Content Writer at 5paisa. She has completed her Master’s in Finance and Graduation in Statistics from the University of Mumbai. 

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