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Life Insurance Corporation of India - LIC IPO

Upcoming

IPO Synopsis

The LIC IPO is set to become one of the biggest IPOs to date, as India's largest insurance company is set to file the draft red herring prospectus (DRHP) this month. Initially, DIPAM was to offer 10% of the issue to the public but due to an amendment, they can now offer only 5% if it is justified. The issue size is speculated to be around Rs.60,000 crore to Rs.100,000 crore. It is to be the biggest IPO to date in the Indian stock market, beating Paytm's IPO by more than 5 times.

The Department of Investment and Public Asset Management (DIPAM) is the nodal government agency overlooking LIC's IPO which includes finalizing the embedded value of LIC and complete the valuation of unlisted LIC shares. Finance Ministry had selected Milliman Advisors LLP India as the Reporting Actuary to derive the embedded value of LIC shares ahead of it's IPO, Deloitte and SBI Caps are the pre-IPO transaction advisors.

 

 

 

About Life Insurance Corporation of India - LIC

LIC was incorporated in 1956 by the amalgamation of 245 private insurers and private fund societies. In 2000, 26% FDI in the insurance sector was allowed, which has now been increased to 74%. The company held a monopoly over the insurance sector till the 1990s after which many private players rose. Even thought there are 23 private insurers in the market, LIC still holds more than 74.58% market share as of 31 March, 2021. 
LIC has around 2,048 branches all over the country and as per their latest report, they have 8 zonal offices in India in Delhi, Chennai, Mumbai, Kolkata, Kanpur, Patna, Bhopal and Hyderabad. They also have 113 Divisional offices, 1,178 mini offices and 1,526 Satellite offices. 
The company has also made efforts to improve its asset quality ahead of the IPO. The percentage of gross NPA went down from 8.17% in FY20 to 7.78% in FY21. Rs.34,934.97 crore has been put aside for doubtful debts and loss assets.

Life Insurance Corporation of India - LIC Promoter Holding

No data Available

Key Points

  • Strengths:

    1.The LIC agent’s network is enviously huge. As of 31 March, 2021, the company states that they had around 13.53 lakh individual LIC agents, as compared to the 11.01 lakh agents for a total of 20 private life insurers
    2.LIC has diversified its business and has also forayed into – LIC Housing Finance, LIC Mutual Fund, LIC Pension Fund, LIC Cards Services. Along with this, LIC also acquired IDBI bank in 2019
    3.They directly operate their foreign branches which are situated in Fiji, Mauritius and United Kingdom
     

  • Risks:

    1. As the company is a public sector unit, it faces a lot of rules and restrictions
    2. Their internal policies need to be amended according to the fiscal and monetary policy changes of the country
     

How to Apply for an IPO?

  • Login to your 5paisa account and select the issue in the current IPO section
  • Enter the number of lots and price at which you wish to apply for
  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
  • You will receive a mandate notification to block funds in your UPI app
  • You will receive a mandate notification to block funds in your UPI app

Don’t have a Demat account? Open one with 5paisa today!

Keep your documents and get your account activated to start applying for Life Insurance Corporation of India - LIC IPOs in just few hours.

FAQs

What is LIC IPO?

Union government has approved the disinvestment of equity shareholding in LIC. For LIC’s IPO, government has amended the LIC Act of 1956. After the LIC act amendment, corporation will be governed by the Companies Act and Markets Regulator Act post the IPO. 

What will be the size of LIC IPO?

Government-appointed actuary has pegged the embedded value (EV) of the Life Insurance Corporation of India at ₹4-5 lakh crore, a key parameter that will be used to compute the market valuation of India’s largest insurer.
Considering the hefty size of the issue, SEBI eased the norms, the IPO size is required to be ₹10,000 Cr plus 5% of the incremental market cap beyond ₹1 lakh crore for very large companies. According to current estimates, IPO size could be upto ₹1 lakh crore which will be more than 5x of India’s biggest IPO till now i.e. Paytm IPO.

When will LIC IPO open for subscription?

LIC will be filing DRHP with SEBI by end of January. Although official dates of LIC IPO is not announced yet, LIC IPO is expected to open for subscription in March 2022, before the end of Quarter 4.

Can a policyholder apply for LIC IPO? What are the requirements for policyholders?

Yes, LIC policyholders can apply for IPO issue. The prerequisites to be eligible for IPO under policyholder category are:

  • PAN details of the policyholder should be updated on LIC portal
  • Policy holder should have a demat account
     
How to update PAN on LIC portal for policyholders?
  • Visit LIC website – www.licindia.com and click on ‘Online PAN registration’
  • Enter details including date of birth, email ID, name as per PAN, mobile number and policy number. If there are multiple policies, add all the policy numbers
  • Enter the mobile number OTP which will be sent to the registered mobile number of policyholder
  • After authentication, check the status on ‘Online checking policy PAN status’
     
What is the lot size and minimum order quantity of LIC IPO?

IPO details are not announced yet, keep yourself updated by visiting 5paisa.com

Who are the merchant bankers for LIC IPO?

Union government has appointed 10 merchant bankers for managing LIC IPO - Goldman Sachs (India) Securities, Citigroup Global Markets India, Nomura Financial Advisory and Securities India, SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities and Kotak Mahindra Capital Co Ltd

Related Articles

LIC to File for IPO in Third Week of January 2022

  • 5paisa Research Team
  • 04 Jan 2022

LIC to File DRHP for Mega IPO in December

  • 5paisa Research Team
  • 18 Nov 2021

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