Key details of the LIC IPO

The largest financial institution in India, Life Insurance Corporation (LIC), currently managing more than Rs 38 lakh crore of public funds, is getting listed on the stock exchanges with an initial public offering (IPO) of Rs 21,000 crore early next month.

 

LIC priced its IPO, the largest in the Indian history of the market despite a reduction in size, at Rs 902-949 per share.

 

It has offered a discount of Rs 60 to policyholders and Rs 45 to retail investors and employees. An initial public offering is scheduled for May 4 and will close on May 9.

 

Bidding may be done in multiples of 15 shares. Due to the Russian invasion of Ukraine and sustained selling by foreign portfolio investors (net of Rs 1,65,841.32 crore since December 2021) the size of the IPO was reduced from ₹65,000 cr. to ₹21,000 cr.

 

 

LIC IPO Details-

 

IPO Opening Date: May 4, 2022

IPO Closing Date: May 9, 2022

Issue Type: Book Built Issue IPO

Face Value: ₹10 per equity share

IPO Price: ₹902 to ₹949 per equity share

Market Lot: 15 Shares

Min Order Quantity: 15 Shares

Listing At: BSE, NSE

Issue Size: 221,374,920 Eq Shares of ₹10 (aggregating up to ₹21,008.48 Cr)

Offer for Sale: 221,374,920 Eq Shares of ₹10 (aggregating up to ₹21,008.48 Cr)

Retail and employee Discount: Rs 45 per share

Policyholder Discount: Rs 60 per share

QIB Shares Offered: Not more than 50% of the Net Offer

Retail Shares Offered: Not less than 35% of the Net Offer

NII (HNI) Shares Offered: Not less than 15% of the Net Offer

 

 

What are the Objects of the Issue?

The net proceeds from the offering will be used for the following purposes: In order to obtain the advantages of listing equity shares on a stock exchange.     To make an offer for sale of 221,374,920 shares by selling shareholders.

 

 

What are the Strengths of LIC IPO?

On September 1, 1956, the Life Insurance Corporation was formed by combining and nationalizing 245 private life insurance companies with a capital of Rs 5 crore.

 

It is one of the insurance companies that are among the top 10 insurance sector companies in the world and the largest asset manager in the country.

 

The company covered 91% of all districts as of December 31, 2021, and had approximately 1.33 million individual agents. Furthermore, it had a market share of 61.6% in terms of premiums or gross written premiums, 61.4% in terms of new business premiums, 71.8% in terms of number of individual policies issued, and 88.8% in terms of number of group policies issued.

 

 

What are the Risks of LIC IPO?

The brand name, reputation, and perception of the company are affected by unfavorable publicity. A decrease in persistence metrics as a result of a change in persistence metrics. In addition, LIC has segregated its single consolidated Life Fund into two separate funds, one of which is for participating policyholders, and the other a fund for non-participating policyholders.

 

In the case of insurers, the difference between the number and/or value of claims in relation to the assumptions used in pricing their products and establishing reserves for their products. The company's revenue is derived primarily from participating products and premium single products that make up a significant portion of its revenue. It competes fiercely in a highly competitive market.

 

 

What makes it more reliable than others?

The profile of LIC will be enhanced. Individuals can trade in its shares or hold them over the long term.

In addition, the LIC will become more transparent and accountable to its shareholders for any mismanagement.

Accordingly, it must comply with the listing guidelines of stock exchanges and SEBI regulations.

 

Disclaimer- This article is solely for providing information and is not intended to give any advice. All investors are advised to conduct their own independent research into individual stocks before making any decision.

 

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