What Investor can expect from India Biggest IPO - LIC IPO | Motilal Oswal
What Investor can expect from India Biggest IPO - LIC IPO | Motilal Oswal

What You can Expect from the LIC IPO

As the Government of India prepares itself for the launch of the mega IPO (initial public offering) of the decade, market experts are only talking about how the LIC IPO will give investors a long-term investment scheme. According to reports from credible sources, the Indian government is going to dilute a percentage of its stake in the Life Insurance Corporation of India (LIC) of which, at the moment, it is the sole owner. IPO expectations by analysts in the market have a lot to do with how a company has performed and how much that has bearing on the success of the IPO and benefits to investors. 

Expectations from Key Players

Several key players and economists have made predictions about the upcoming IPO, making one distinctive observation about the offering: it stands to be a good investment option by all accounts. Hence, in light of this, IPO expectations represent the fact that the LIC IPO is likely to be oversubscribed. It is also expected that the LIC IPO, due to the enormous amount of subscription applications, may not be available for allotment to all who apply. The large amount of subscriptions is likely to occur, analysts believe, because the Life Insurance Corporation is the single PSU or public sector undertaking in the sector of insurance with a financial standing that precedes itself. 

Why are LIC IPO Expectations High? 

Since you have got the general impression that investment in the LIC IPO is a good financial decision, especially if you wish to diversify a portfolio, you may want some more reasons for this. With a historical background of an insurance company that has stood the test of competition, and due to the support of the government, you can be assured of making a good investment decision when you subscribe to the LIC IPO. Expectations from this IPO are high due to the following: 

  • LIC makes up more than 70% of the total market share in the insurance sector in India.
  • Despite stiff competition from private insurers, LIC is the sole PSU that has maintained itself as the No. 1 insurer in the nation.
  • Net profit of LIC surged to Rs. 1437 crore in 2021.
  • For long-term growth potential, the LIC IPO makes available a fruitful investment opportunity. 
  • For LIC employees and retail investors, investing in the IPO for long-term profit and quick daily earnings may prove beneficial.
  • It is rumoured, to the point of being almost true, that holders of any LIC policy will have a reservation in the subscription of the LIC IPO, amounting to 10%. 
  • The size of LIC is huge, with its own investments amounting to somewhere near $500 billion. Moreover, its network of distribution is massive. When investors invest in a company as large as this, investors will want to know about the plans for growth that lie with LIC. Questions that investors are likely to ask are related to LIC’s business strategy and its future performance, after the listing takes place. With firm promises of transparency to its shareholders, LIC has assured that information will be disseminated transparently. 

What Recent Reports Say

The much-anticipated LIC IPO is now on the verge of opening its pages to the public. Latest news reports state that the IPO will open on 2 May 2022 for employees of LIC and its policyholders as well. On 4 May 2022, the offer will be available to the public. It will close for all concerned on 9 May. The long-awaited (and much-delayed) IPO is expected to be in the price band of Rs.902-Rs.949. Furthermore, the Indian  government is likely to give a discount amounting to Rs. 60 to policyholders and a discount of Rs. 45 to employees and retail investors, sources have added.

In the latest news, the LIC board has approved an IPO issue size cut, from its initial 5% to 3.5%. Now the government is expected to sell 3.5% of its stake in LIC for Rs. 21,000 crore.

Invest and Earn

You may wish to invest your wealth and distribute it to many asset allocations. If you wish to apply for the LIC IPO, and wish to know more about IPO expectations, you can visit Motilal Oswal for all your information sourcing. You can also make investments at this very reputed brokerage that provides sound investment advice. 

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