If you think that size matters, then the LIC IPO, the delay of which has only piqued more interest in it, could be one to invest in. IPO allotments do not get bigger (or better) than this, and after a long spell of waiting, investors have set aside enough funds to invest in one of the largest upcoming IPO in Indian IPO history. Forget the sheer size of the company (the largest insurance company in India), the sheer numbers are just staggering enough. The size of the issue stands at somewhere between Rs. 52,000 and Rs. 90,000 crores, cutting down to size Paytm’s listing of Rs. 18,000 crore. Until that time, it was considered India’s largest IPO up until LIC was due to launch its own.
Analysts have said that, after LIC is listed, it could likely emerge as third on the list of most valued companies in the nation, Reliance and TCS being the top two. One more thing of note is to know that the Government of India has trimmed its sale stake, from the earlier 5% to 3.5% now. This amounts to Rs. 21,000 crore of disinvestment for the government.
So, why should you choose to invest in the LIC IPO? Apart from the reasons already mentioned, the IPO has tweaked at the popularity strings of many investors and through word-of-mouth about its delay, more investors want to invest in it now than if it had been released earlier. That, however, should not be the reason to invest. Following the herd is not the way to go about your investment. Instead, if you look at the facts before you, you may be more convinced that LIC is a robust company to invest in. In spite of its government-centric ownership and criticism about its efficiency, LIC, as a life insurance company, manages to sell above 70% of all life insurance plans, getting 65% of the total in new premium amounts. Furthermore, it has assets (under its management) that are almost 16 times larger than the other insurers (great and small) in the country.
Due to the reach and scalability of LIC, the company offers investors a unique opportunity to invest in an IPO. The LIC IPO promises the brand of a company that is built on trust, and although growth may not seem exponential, the company’s historical data proves otherwise. Beforing investing, it is prudent to do your research or get in touch with a financial advisor. It comes out on 2nd May 2022 for LIC employees and holders of LIC policies and on 4 May for all retail investors. The price band offered is Rs. 902 - Rs. 949, and with the good news of a discount of Rs. 60 to policyholders and Rs. 45 to employees and retail investors, new investors will be drawn to its appeal. The allotment date is set at 12 May, and the minimal lot you can invest is 15 shares. In case you do not receive allotment, refunds will be deposited into your bank account on 13 May. If you are fortunate enough to receive allotment, shares will be deposited in your Demat account by 16 May.
Most investors seek portfolio diversification, and if you are among those, then this could be an IPO you can consider investing in. In case you wish to invest, head over to Motilal Oswal to find out more and open a Demat account while you are there. Opening a Demat account is a requirement to invest in the IPO. In case you are not allotted the shares of the LIC IPO that you applied for, worry not, as you can find many more investment options at Motilal Oswal.