All You Need to Know About the LIC IPO

Introduction

The dates for the launch of the LIC’s IPO have lastly been fastened. According to the newest reviews, the LIC IPO is slated to open on 4 May 2022 and shut on 9May 2022. This information has introduced some respite for the traders whose nervousness ranges reached sky-high after ready for the IPO for fairly a while now. This IPO was earlier purported to get launched earlier than 31March 2022. However, the continued Russia-Ukraine warfare led to the delay of the launch date.

Talking in regards to the LIC IPO, it’s anticipated to be India’s largest IPO to this point, surpassing PayTM’s IPO. The complete valuation of this IPO is predicted to be round Rs. 21,000 crore and the LIC being India’s largest and world’s fifth-largest life insurance coverage firm might create a stir within the Indian inventory markets. Continue studying to know all the things in regards to the LIC IPO intimately.

The provide particulars

As talked about, the LIC IPO is predicted to be India’s biggest-ever IPO with a valuation of roughly Rs. 21,000 crores. It would surpass the PayTM IPO, which is the present report holder with a valuation of Rs. 18,300 crore. The authorities of India, which owns a 100% stake within the LIC, is planning to promote a 3.5% stake within the firm by this IPO. This is a decline from the sooner estimates of the sale of a 5% stake.

As per the Draft Red Herring Prospectus (DRHP) filed by the LIC with the Securities and Exchange Board of India (SEBI), the IPO might encompass 31,62,49,885 fairness shares with a face worth of Rs. 10 per share. Fifty % of this public challenge can be reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Buyers (NIBs), and the remaining 35% for retail traders.

IPO Timeline

Although the precise IPO timeline is but to be introduced by the issuing firm, the tentative dates for closing and opening of the IPO are out to the general public. If all the things goes nicely, the LIC IPO might open on 4May 2022 and shut on 9 May 2022. This IPO was earlier scheduled for launch in March 2022, however the ongoing Russia-Ukraine warfare led to its postponement.

The tentative IPO allotment date, refund date, and itemizing date are but to be introduced. The IPO may very well be priced within the vary of Rs. 950 to Rs. 1,000 per fairness share.

Details of the issuing firm

The issuing firm of the IPO is the Life Insurance Corporation (LIC) of India. At current, it’s India’s largest life insurance coverage firm and the fifth-largest globally. As per the DRHP, the embedded worth of the LIC is roughly Rs. 5.4 lakh crore. However, going by the federal government’s estimates of a 3.5% stake price Rs. 21,000 crore, the corporate’s valuation might change into greater than Rs. 6 lakh crore.

The LIC has a large market share of 66.2% in India by way of new enterprise premium and 74.6% by way of the variety of particular person insurance policies issued. It additionally has a big international presence with the entire Assets Under Management (AUM) price Rs. 31 lakh crore. LIC can be the most important institutional investor in India with a complete funding of roughly Rs. 120 lakh crore.

The complete income generated by the LIC in the course of the monetary years 2019-20, 2020-21, and 2021-22 stood at Rs. 2627.30 crore, Rs. 2710.40 crore, and Rs. 29,74.40 crore, respectively.

Strengths and Weaknesses

Let’s consider the strengths and weaknesses of the LIC IPO. Below are the strengths of this IPO, which is touted as India’s biggest-ever IPO:

LIC is the main life insurance coverage firm in India and fifth-largest globally
The firm presents a variety of life insurance coverage merchandise to cater to diversified public wants
It has a really sturdy distribution community with 1.34 million brokers, 2048 branches, and 174 alternate channels throughout India
Largest asset supervisor within the nation with a confirmed observe report

Below are the dangers and weaknesses:

The COVID-19 pandemic has impacted the enterprise adversely
Any unfavourable publicity can impression the model identify
Adverse variation in persistency metrics might impression the revenues
Rise of a number of personal gamers within the section
Market downswings can extremely impression the corporate’s valuation

The ultimate phrases

The LIC IPO has already created a euphoria among the many traders and it might shake up the Indian inventory market as soon as it will get launched. If you need to subscribe to the LIC IPO, you may apply for it through a demat account. You can open your demat account without spending a dime with ICICIdirect, one of many main stockbrokers in India. Moreover, it’s also possible to select a brokerage construction as per your necessities. Being a full-service dealer, they supply advisory providers together with buying and selling amenities.

This content material is distributed by Icici direct. No TNIE Group journalist is concerned within the creation of this content material.