The current economic scenario is rife with opportunity for investment. More and more investors are moving away from traditional ‘secure’ means of investment like fixed deposits, and moving to (albeit) risky areas, but those which may give huge returns. Hence, we see the crowding of investors in the stock markets and with so many new channels open to investors, individuals want to cash in. An IPO, or initial public offering, is not a novel form of investment, but it can give investors significantly high returns. One of these, the upcoming LIC IPO, has prompted a buzz by investors who are anxiously waiting for its release. Is it worth investing in, though? Getting your fundamentals clear about IPOs and LIC can encourage you to make an informed decision.
A meglith among insurance companies in India, the Life Insurance Company (LIC) is about to go public with its IPO, or initial public offering, in May 2022. An initial public offering is nothing more than a launch of stocks of a company for the public to buy. An initial public offering is when shares of a company are offered for purchase, for the first time, to retail investors and to institutional investors. In the case of the LIC, the release of the IPO spells promise for investors as they get the opportunity to become shareholders of a reputed company that analysts predict to only prosper in the future. The Life Insurance Company is a company that is operated by the Government of India, and reports previously stated that the government’s wish was to dilute a stake of 5% in the company, raising around Rs. 75,000 crore. Consequently, this would give the insurance giant a Rs. 15 lakh crore valuation.
Investing in any big-ticket IPO is a simple process. You, as an investor, can make an online investment, either through your bank or better still, through a reputed brokerage like Motilal Oswal. This may be the least of your concerns while investing in an IPO. The larger question is, should you make an investment at all? The answer depends on your investment goals. If the prospects of a company are that of abundant future growth, and according to historical data, LIC is only touted to develop and see a substantial growth path, then the upcoming IPO 2023 is worth investing in. Another reason to invest in the LIC IPO is that it is the single most public sector undertaking (PSU) that has managed to keep a tight hold on its market share. This has occurred even after privatisation has hit the insurance sector, among several other players. LIC continues to be the only tough insurance company, in the span of 20 years, that has successfully survived the onslaught of numerous private competitors entering the insurance fray. With this reason, alone, you can safely invest in the upcoming LIC IPO.
Investors may be weary of waiting for an upcoming IPO that was to open its doors in March 2022. Nonetheless, the recent news that the LIC IPO is finally going to be up for sale has investors alert once more. The IPO, delayed due to the war in Ukraine, is now going to be open on 2 May for policyholders and employees. It will open on 4 May for the public. On 9 May, the IPO will close. In further news, the IPO will be offered in the price band of Rs. 902-949. Most likely, the government will give a Rs. 60 discount to LIC policyholders, and a Rs. 45 discount to retail investors and LIC employees.
Additionally, the LIC board has approved a cut in the LIC IPO issue size from 5% to 3.5%. The government will now sell 3.5% of its share in LIC for Rs. 21,000 crores.
The power of brand “LIC” is predicted to attract several investors who are viewing this initial public offering as a first-time investment opportunity. If you wish to invest in it, just visit Motilal Oswal and open a Demat account. Your brokerage can help you subscribe to the IPO successfully.