LIC or the Life Insurance Corporation of India Ltd is an Indian, government-owned statutory insurance and investment corporation. The insurance company was established in September 1965, under the nationalized Life Insurance of India Act. LIC was a result of the merger of more than 245 insurance and provident societies. At present, LIC is the biggest insurance company in India, having 66% market share in the industry. As of 2020, the number of policyholders stood at 28.9 crores, making it the King of the Insurance Industry in India. As of March 31, 2020 it had total assets of Rs 37.75 lakh crore and equity AUM of Rs 6.63 lakh crore.
Deemed to be India’s biggest IPO till date, the Life Insurance Corporation of India Ltd has certainly got everyone’s attention. As per the reports, the LIC IPO is anticipated to raise an issue between Rs 70,000 crores to Rs 1,00,000 crores. With its IPO, the government-owned company is keen on taking a valuation close to Rs 15 Lakh crores. At this valuation, the company will stand in line with India’s biggest publicly listed companies such as Reliance Industries Ltd, Tata Consultancy Services Ltd and HDFC Bank Ltd. While the life insurer is yet to file its DRHP with SEBI, market analysts predict that the IPO is going to be a game changer for the primary markets in India. In the calendar year 2021, more than 68 companies released their IPOs raising more than 1.18 lakh crores in the primary market. The IPO is a decision of the Government’s plan for its disinvestment. The government is keen on churning out Rs 1.75 Lakh crores by disinvesting minority stakes and privatization of banks and insurance companies. The LIC IPO is expected to meet the shortfall in this target.
- As per the latest developments, the company in the process of filing its DRHP with the SEBI (which is tentatively slated to be filed by the end of January 2022)
- The company is aiming to go live with its IPO in the last quarter of the FY 2021-22, which can be anywhere between February 2022 to March 2022.
As stated by the Government, it is believed that the policyholders of the insurance company will get a special reservation of up to 10% for IPO application or either would get a discounted rate on the issue or both. The reservation is the Government’s effort to market the IPO as well as churn in a good volume for the IPO. Only 3% of the total population in India holds a valid DEMAT Account. This provides a huge scope for all DEMAT Holders, who also hold policies of the LIC, to get the IPO allotment. Having a policy and having a DEMAT Account will prove beneficial for investors - as they may not only get subscription to the shares of the insurance company, but may also get high listing gains post the issue. Whilst analysts believe the IPO to be a major breakthrough, all depends on the pricing and the valuation that the company stands at and that it tries to seek.
LIC’s numbers speak for themselves. With a network of more than 13 Lakh agents spread across the country, LIC has a combined strength of a total of 20 private life insurance companies in the country. Not only does LIC operate in India, but also has operating branches located in Fiji, Mauritius, and the UK. LIC does not only operate as an insurance provider in the country, but has ventured into several other verticals such as LIC Housing Finance, LIC Pension Fund, LIC Mutual Fund, and LIC Card Services. LIC also holds a 51% stake in IDBI Bank, making it the only insurer in India to own a bank.
If you are an existing policyholder of LIC, it is mandatory that you link your PAN with the LIC Policy. In this way, you can get a reservation for the IPO application under the policyholder category. To link your PAN with your policy, you will have to click on - https://licindia.in/Home/Online-PAN-Registration. Enter the data required and proceed.
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