LIC IPO - Details
The wait for India’s biggest IPO is over. Life Insurance Corporation of India Ltd is coming out with its IPO in the month of May 2022. As per the reports, the LIC IPO is finalized to raise an issue of Rs ₹21,008.48 crores. With this IPO, the government-owned company is keen on taking a valuation close to Rs 6 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.
Opening Date
04th May 2022
Closing Date
09th May 2022
Face Value
₹10 per equity share
IPO Price Band
₹902 to ₹949 per equity share
Minimum Order Quantity
15
Issue Size
Rs ₹21,008.48
Crores
Retail & Employee Discount :
₹45/share
Policyholders Discount :
₹60/share
Understanding LIC
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 1st 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.
Objectives of LIC IPO
According to the DRHP filed with SEBI, LIC has proposed underlying objectives for its IPO
- Achieve the benefits of listing the Equity Shares on the Stock Exchanges.
- Carry out the Offer for Sale of up to 221,374,920 Equity Shares by the Selling Shareholder.
Why should you invest in the LIC IPO?
Following are the set of reasons why we think you should be interested in investing in LIC IPO
- LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in India, with a 64.1% market share in terms of premiums
- LIC is the largest asset manager in India as at September 30, 2021
- Strong Domestic and Global presence
- Strong Financials
| Particulars | As at / for the year ended March 31, 2021 | As at / for the year ended March 31, 2020 | As at / for the year ended March 31, 2019 |
|---|---|---|---|
| Total Revenues | 38,057.55 | 301,982.16 | 104,303.73 |
| Total Assets | 202,755.41 | 3,239,124.35 | 3,401,535.50 |
| Networth | 1,890.10 | 1,319.00 | 1,599.00 |
| Net Assets | 31,911.50 | 384,401.86 | 402,885.26 |
| Total Net Profits | 1,913.12 | -117,633.77 | -43,796.01 |
| Net cash inflow / (outflows) | 3,994.38 | 96,362.97 | 127,050.01 |
| Group’s Share in Profit/(Loss) in its associates | 11,633.54 | 5,744.42 | 6,683.97 |
How to apply for the LIC IPO?
- 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.
- You are also required to open a DEMAT account with a SEBI registered stockbroker such as Motilal Oswal, through which you can apply for the IPO. The PAN Card used for LIC policies has to be the same as that registered with the Demat Account registered with the stockbroker.
- Once you have a verified Demat Account with Motilal Oswal, you can apply for the IPO through the MO INVESTOR or the MO TRADER App. All you have to do is
- Go to Menu
- Select the option for ‘Other Products/Tools’
- Click on ‘IPO/OFS/BUYBACK/BONDS/FD’
- Apply for LIC IPO
- Now you can also Pre-apply for the IPO with the newest Pre-apply IPO Feature
- Click on the Menu section
- Go to Other Product /Tools
- Click on IPO
- A Separate Tab for the new section will open
LIC - IPO Analysis
(A) Strengths
- LIC is 5th largest life insurer globally by GWP and the largest player in the fast growing and underpenetrated Indian life insurance sector
- Trusted brand and a customer-centric business model
- Cross-cyclical product mix that caters to diverse consumer needs and an individual product portfolio that is dominated by participating life insurance policies
- Presence across India through an omni-channel distribution network with an unparalleled agency force
- Largest asset manager in India with an established track record of financial performance and profitable growth
(B) Risks
- Tougher competition from New-age private insurance companies such as HDFC Life, ICICI Prudential Life Insurance, etc.
- Restrictions on LIC since it is a Public Sector Undertaking
- Large workforce - which makes functioning challenging and hideous
- Changes in the fiscal policy
LIC IPO FAQs
1. When is the LIC IPO coming?
The LIC IPO is stated to be releasing in the last week of April 2022. However, the same hasn’t been confirmed by the insurance company.
2. How many shares are being issued in the LIC IPO?
As per the DRHP filed by the insurance company, the total number of shares issued under Offer for Sale stands at 316,249,885 of face value ₹10 per equity share.
3. Who and how do I need to apply for the LIC IPO?
Anyone who wants to invest in the LIC IPO can be part of the IPO listing. However, participants who hold LIC policies and have linked their PAN Card number with their policy are stated to get special reservation in the IPO.
To apply for the IPO, you will have to open a DEMAT Account with a SEBI registered Broker, such as Motilal Oswal Financial Services Ltd.
To apply for a Free DEMAT Account online, click here.
4. What advantages do policyholders have in the LIC IPO?
According to the DRHP filed by the company, it is said that 10 percent of the total shares for sale will be reserved for LIC policyholders.
Under the special category, LIC policyholders are eligible to apply for the IPO, up to a sum of ₹2,00,000.
Policyholders in the LIC IPO are also entrusted to be entitled to have up to 10 percent discount on the issue amount.
5. What conditions are applicable for LIC policyholders to apply for the LIC IPO?
The quota reservation for policyholders is only applicable for individuals who have purchased the LIC policy on or before 13th February 2022. Individuals who have purchased the LIC policy after February 2022, are not eligible to get a reservation on IPO.
To be eligible to get a reservation in the IPO, it is necessary that policyholders link their PAN card number with their policy numbers before 28th February 2022.
If two or more individuals hold joint policy then the individuals can apply for the IPO separately, given they have linked their PAN with the Policy.
Group Policy Holders cannot apply for IPO under reservation quota.
If two or more individuals hold a Joint Demat Account, only the Primary Account holder is allowed to apply for the IPO. Secondary holders are not permitted to apply for the IPO separately.
6. Is it necessary for policyholders to have a demat account to apply for shares in the offer?
Yes, absolutely. According to the SEBI ICDR Regulations, any company cannot issue no equity shares in physical form and the equity shares can only be issued in dematerialized form. Hence, it is mandatory for all investors, who wish to apply for the IPO, to have a DEMAT Account.
