Long awaited LIC IPO finally hitting the Dalli Street on 4th of May 2022, LIC IPO is the biggest IPO in the history of Indian Stock Markets. LIC IPO is expected to raise ₹ 21,000 Crores at the upper end of the price band, and will be a key factor for the government to meet its divestment targets.
About LIC
Life Insurance Corporation of India is one of the biggest and oldest Insurance Companies in India for more than 65 years. LIC was formed in 1956 by merging and nationalizing around 245 private insurance companies.
LIC has a market share of above 66.2% in new business premium. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.
Life Insurance Corporation invests in various sectors like banks, cement, chemicals, electronics, finance, and investments, healthcare, hotels, textiles, transportation, transportation & logistics, electrical and electronics, engineering, construction, etc.
Strengths of LIC
- LIC is a part insurance and part investment products company. Their plans are a combination of insurance and investment with a guaranteed return.
- LIC has over 13.5 lakh agents who play brings most of the new business. LIC plans offer ‘fixed returns’ along with life insurance coverage. This makes it easy to sell by agents and brings peace of mind to the insurers.
- LIC has high trust in the public for both life insurance as well as investment done with them. LIC is synonymous with insurance in India.
- LIC manage asset of Rs 39 lakh crores. That is more money than the entire mutual fund industry combined. They invest these funds across stocks and bonds. They own 4% of all listed stocks in India and more government bonds than the RBI.
- Leading insurance provider company in India and fifth largest global insurer by GWP.
- A range of life insurance products to meet varied insurance needs of individuals.
Weakness of LIC
- LIC has poor new policy growth as they continue losing market share to private insurance players, especially in urban areas.
- The margin in insurance + investment products is low.
- It’s very difficult to value LIC as the business model is unlike any other company. LIC collects money upfront and then promises to compensate policyholders at a later stage. The premiums they collect (part insurance and part investment) cannot be recognized as revenue.
LIC IPO Details: –
| LIC IPO Issue Opens on | 4th May 2022 |
| LIC IPO Issue Closes on | 9th May 2022 |
| LIC IPO Price | ₹902 to ₹949 per share |
| LIC IPO Lot Size | 15 Shares |
| Issue Size | 22,13,74,920 shares of ₹10 (aggregating up to ₹21,008.48 Cr) |
| Offer for Sale | 22,13,74,920 shares of ₹10 (aggregating up to ₹21,008.48 Cr) |
| LIC IPO Face Value | ₹10 per share |
| Retail Discount | ₹ 45 per share |
| Employee Discount | ₹ 45 per share |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| QIB Shares Offered | 50% of the Net Offer |
| Retail Shares Offered | 35% of the Net Offer |
| NII (HNI) Shares Offered | 15% of the Net Offer |
| Company Promoters | The President of India, acting through the Ministry of Finance, Government of India is the company promoter. |
LIC IPO Important Dates:
| IPO Open Date | 4th May 2022 |
| IPO Close Date | 9th May 2022 |
| Allotment Date | 12th May 2022 |
| Update Your PAN In LIC Records | 28th February 2022 |
| Initiation Of Refunds | 13th May 2022 |
| Credit Of Shares To Demat Account | 16th May 2022 |
| IPO Listing Date | 17th May 2022 |
Apply as a Policyholder
- LIC Policyholders can only apply as policyholders if they hold LIC policy issued before 13th February 2022.
- LIC Policyholders must have linked their pan to LIC policy before 28th of February 2022.
- Discount for LIC policyholders – ₹60.00
- LIC policy holders can apply as policyholder or as regular.
LIC IPO Lot Size
The LIC IPO lot size is 15 shares. A retail-individual investor / policyholders can apply for up to 14 lots (210 shares or ₹199,290).
| Application | Lots | Shares | Amount |
| Minimum | 1 | 15 | ₹14,235 |
| Maximum | 14 | 210 | ₹199,290 |
LIC IPO Objectives
- The government aims to get 21,000 crores by offloading 3.5% of its shares.
- Enhance the brand image & provide a public market for the equity shares in India.
Financial highlights
| Financial Year | Total Assets (In Cr) | Total Revenue (In Cr) | Profit After Tax (In Cr) |
| FY 2020 – 21 | Rs. 37,46,404 | Rs. 7,03,709 | Rs. 2,974 |
| FY 2019- 20 | Rs. 34,14,174 | Rs. 6,45,605 | Rs. 2,710 |
| FY 2018 – 19 | Rs. 33,66,335 | Rs. 5,70,810 | Rs. 2,627 |
Brokers Recommendations
90% brokers recommending the subscribe rating to the LIC IPO
Why LIC IPO is important for Indian Economy?
Govt. of India has planned for stake sell in LIC of India to raise the funds, and expected to sell around a 3.5% stake in LIC. Indian Govt. has announced the growth oriented budget earlier this year and the government entire focus is on boosting the Indian economy so LIC IPO is the largest source for Govt of India. The funds generated from the stake sale of LIC, Govt. can use the same to boost the growth of the Indian economy. The government can pump in this money into infrastructure or any other schemes as projected by the Govt during the budget. This can help in creation of jobs and even drive consumption. In simple words the LIC IPO and the funds raised by Govt could be beneficial for individuals like you and me.
Why LIC IPO is important for Govt. of India?
The LIC IPO is extremely important for the government to meet their divestment targets and to chalk out the future road map.
LIC of India is Govt of India owned company and the stake sell in Govt companies to raise funds is called disinvestment.
The government has revised their divestment target for FY22 to ₹78,000 crore from ₹1.7 lakh crore. Obviously, through the LIC IPO the path for achieving the government divestment targets was clear through LIC IPO, the LIC IPO was postponed due to the Russia-Ukraine conflict fuelled the market volatility. And in the end, the government fell short of its revised FY22 divestment target.
For FY23, the government has fixed the divestment target at ₹65,000 crores & through LIC IPO Govt is getting ₹21,000 crores. This means that the LIC IPO will once again be crucial for the government to meet this year’s divestment target.
Also, after the listing, the government can further trim its stake in LIC to raise more funds in the future. Simply put, the listing of LIC could help the government to meet its fund requirements, going forward.
Why LIC IPO is important for Indian stock markets?
Besides the Indian government and the economy, the LIC IPO is also crucial for the domestic stock markets. LIC is a household name and a trusted brand. Hence, people across age groups have been showing interest in the LIC IPO.
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