Life Insurance Corporation of India is an investment and insurance corporation owned by the Government of India. LIC is the only life insurance company in the Indian public sector with an extensive presence in rural and urban areas. It operates through 8 zonal and 113 divisional offices.
As a part of its ambitious disinvestment endeavour, the Central Government aims to list Life Insurance Corporation of India (LIC) by the last quarter of this fiscal year.
LIC is the only government-owned insurance company in the country. The entity was formed by merging around 245 insurance companies. Other highlights include –
Per the 2019-2020 annual report, LIC occupies 69% of the market share in the life insurance segment.
Besides life insurance, the company also extends mutual funds, pension funds, housing finance, and card services.
Besides digital payment, the company is adept at cross-selling small sachets of insurance policies and loans.
As of 31 March 2021, there were around 13.53 lakhs individual LIC agents
It has more than 1.14 lakh employees.
LIC IPO OBJECTIVE
- To prepay/repay the company’s outstanding borrowings, either full or partially.
- Meeting organic or inorganic growth initiatives.
- To address corporate objectives.
POSITIVE
These are among the primary reasons why individuals should consider investing in this IPO –
The Life Insurance Corporation of India boasts a reputed brand with stable financial standing and robust market presence.
Investing in LIC could favour investors significantly. The company clocked stock market profits of more than Rs. 10,000 crores in this June quarter. Its strong fiscal standing, robust fund size, and association with the government make LIC a lucrative investment opportunity for many.
NEGATIVE
LIC IPO DETAILS (Tentative)
| Subscription Dates | 10 March-14 March 2022 |
| Price Band | Rs 2,000-2,100 per share |
| Fresh issue | NIL |
| Offer For Sale | 65,416.29 Cr & 31,62,49,885 shares |
| Total IPO size | 65,416.29 Cr & 31,62,49,885 shares |
| Minimum bid (lot size) | 7 Shares |
| Face Value | INR 10 per share |
| Retail Allocation | 35% |
| Listing On | NSE, BSE |
LIC IPO TIMELINE
| IPO Open Date | 10 March 2022 |
|---|---|
| IPO Close Date | 14 March 2022 |
| Basis Of Allotment Date | Not Announced |
| Initiation Of Refunds | Not Announced |
| Credit Of Shares To Demat ACcount | Not Announced |
| IPO Listing Date | Not Announced |
So, how does LIC IPO Fare in Terms of Financials?
These are among the primary reasons why individuals should consider investing in this IPO –
The Life Insurance Corporation of India boasts a reputed brand with stable financial standing and robust market presence.
Investing in LIC could favour investors significantly. The company clocked stock market profits of more than Rs. 10,000 crores in this June quarter. Its strong fiscal standing, robust fund size, and association with the government make LIC a lucrative investment opportunity for many oportunity for many.
LIC’s investee companies
LIC is touted as the biggest investor in India. It has bought shares worth Rs. 90,000 crores in this FY21. Moreover, it plans to touch a stock market investment of Rs. 8 lakh crores by the end of this fiscal year.
Here are some of the most noteworthy investees of LIC –
| Stock | Quantity Held | Holding % |
| Canara Bank | 133,627,205 | 8.11% |
| Bank Of Baroda | 248,334,291 | 4.80% |
| Biocon Ltd. | 49,374,988 | 4.11% |
| PTC India Ltd. | 17,654,072 | 5.96% |
| ABB Power Products And Systems India Ltd. | 1,881,348 | 4.44% |
| Indian Overseas Bank | 228,087,493 | 1.21% |
| Reliance Infrastructure Ltd. | 6,989,930 | 2.68% |
| ABB India Ltd. | 8,376,287 | 3.95% |
| BEML Ltd. | 515,435 | 1.24% |
| Aditya Birla Capital Ltd. | 51,407,882 | 2.13% |
| Hindustan Zinc Ltd. | 96,246,636 | 2.28% |
| Aban Offshore Ltd. | 1,000,000 | 1.71% |
| Titan Company Ltd. | 35,163,104 | 3.96% |
Financial Details
| FY2019 | FY2020 | FY2021 | |
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FINANCIAL REVIEW
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LIC IPO VALUATIONS
| FY2019 | FY2020 | FY2021 | |
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| PE ratio | – | – | |
| Return on Net Worth (%) | |||
| ROCE (%) | |||
| EBITDA (%) | |||
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VALUATION REVIEW:
LIC IPO – SWOT ANALYSIS
Strengths
- Multiple offerings: LIC offers various insurance plans. The most popular products include life insurance policies, money back plans, endowment plans, insurance riders, and term insurance plans.
- Diversified business portfolio: LIC boasts a diversified business portfolio. Some of its most noteworthy lines of business include LIC Housing Finance, LIC Pension Fund, LIC Card Services, and LIC Mutual Fund.
- Sizeable fund base: The company operates with a fund base of nearly Rs. 289.57 crores. Additionally, India’s largest investor has a robust financial standing with sufficient flexibility to grow and expand its portfolio further
Weaknesses
- Restrictions on PSU: LIC is subject to various restrictions since it’s a PSU. Such restrictions could emerge as a roadblock to the operational and expansion goals of this company.
- Large workforce: LIC has more than 1 lakh employees. Maintaining such a large workforce can become challenging, especially during a financial crisis.s
Opportunities
- Online services: The online offerings of LIC cater to a large pool of tech-savvy customers. LIC could tap into the urban market like never before by leveraging the IPO proceeds to establish an extensive digital footprint.
- Increase in disposable income: A surge in individuals’ disposable income and greater awareness about the importance of being insured could continue to favour LIC’s growth.
Threats
- Competition: Several private insurance policy companies and NBFCs are now active in the market. The unique offerings and more customised services of these competitors could pose a threat to LIC.
- Changes in the fiscal policy: Changes in RBI’s monetary and fiscal policies can prompt LIC to modify its policies accordingly. Such changes can be counterintuitive to the company’s earnings or scope of operations.
COMPETITIVE ANALYSIS: MARKET PEERS
LIC of India is the largest life insurance policy provider in the country with a massive market capitalisation.
However, these entities are among LIC’s most noteworthy competitors. The table below offers an insight into its competition and market standing in the last year.
| Competitor | Market Capitalisation | Gains |
| HDFC Life Insurance | 14.45% | 14.63% |
| SBI Life Insurance | 20.95% | 20.84% |
| ICICI Lombard General Insurance Company | 20.44% | 20.77% |
| ICICI Prudential Life Insurance | 45.01% | 44.97% |
| General Insurance Corporation Of India | 25.15% | 24.91% |
| New India Assurance Company | 48.21% | 48.21% |
LIC IPO GMP
- Grey market premium as on DD-MM-YYYY= Rs /Share
- Grey market premium as on DD-MM-YYYY = Rs /Share
- Grey market premium as on DD-MM-YYYY= Rs /Share
- Grey market premium as on DD-MM-YYYY = Rs /Share
Disclaimer:
- IPO Grey Market Premium (LIC IPO GMP) mention is valid for the specific date as mentioned in the header.
- We are not buying and selling IPO forms on IPO Grey Market.
- Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamentals of the companies.
DD/MM/YYYY 5:00 PM
LIC IPO Live Subscription Status
| Category | Shares Offered | |||
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| NII | ||||
| Retail | ||||
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FINAL TAKEAWAY
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