An initial public offering (IPO) refers to the process of offering company shares to general investors of a private company or state corporation. An IPO is when a company sells partial ownership to general or institutional investors in an IPO to raise money from public investors. The allocation of shares by the promoter in the context of a new issue or transfer of offered shares will be sold to shareholders in accordance with a sale offer to the successful bidder.
Let us conduct a detailed review of the company analysis, the company, the IPO publication date, the offer price for the IPO, the subscription, the allocation of the LIC IPO, the gray market price, and other details about the background of the company, the financial position of the company, the promoters of the company and other related matters. The company is the market leader in the life insurance industry with collected premiums and policies sold. With such a strong financial and market position, the foundations of the company are strong and the company appears to be positioned to achieve its financial objectives.
The Life Insurance Corporation of India opened its public issue on 4 May. The government plans to raise Rs 21,000 crores through an LIC IPO by liquidating 3.5 percent of its stake in the insurer. The price range for the LIC IPO has been set at Rs 902-949 per share.
LIC insurers are eligible for a discount of Rs 60 per share. There will also be a discount of Rs 45 for individuals and categories of employees.
The invested value of LIC is Rs 5,39,686 and its implied market capitalization after issuance is Rs 6,00,242 crores, which is 11.2% more than its EEV. The Mcap/EV ratio for its registered counterparts is between 1.5x and 2.5x, so we think the LIC’s ratings, with its majestic size, are reasonable for the price.
As the data shows, its business is heavily based on an agent-based model (90%+), so further growth will require greater digital access to its network. However, with a market capitalization of Rs 6 lakh with a PAT of ~Kr 3,000, the PE ratio is 200(x). In our opinion, the PE ratio is not comparable to private players as the LIC distribution policy has now changed and more distribution to shareholders in the near future to increase and thus cool multiple profits. The company is losing its market share to private operators, which LIC may focus on in the future. With its majestic networks and expected double-digit growth, the industry has received an attractive valuation relative to its peers, making the LIC IPO a worthwhile investment.
LIC IPO Details
|Issue Open||May 4, 2022|
|Issue Close||May 9, 2022|
|IPO Price||₹902 – ₹949|
|IPO Size||₹21,008.48 Cr|
|Listing At||BSE, NSE|
|Offer for Sale||Approx 221,374,920 Equity Shares|
|Discount|| ₹60 for Policy Holders|
₹45 for Retail & Employees
|IPO Lot Size||15|
|Minimum Amount||₹14,235 for 1 lot|
|Basis of Allotment||12 May 2022|
|Refunds||13 May 2022|
|Credit to Demat Account||16 May 2022|
|IPO Listing Date||17 May 2022|
LIC IPO Subscription Status (times)
|May 4, 2022||0.33||0.27||0.60||1.17||1.99||0.67|
|May 5, 2022||0.40||0.47||0.93||2.22||3.11||1.03|
|May 6, 2022||0.56||0.76||1.23||3.06||4.01||1.38|
|May 7, 2022||0.67||1.08||1.46||3.54||4.67||1.66|
|May 8, 2022||0.67||1.19||1.52||3.67||4.84||1.73|
LIC IPO GMP (Grey Market Premium)
How to subscribe LIC IPO?
- Login to your Demat account
- Click on the IPO section from the menu
- Select the ‘LIC IPO’ tab. and select the category as ‘policyholders’.
- Fill in the required information, place a bid, and then click the submit button.
- Accept the mandate from the participating bank
- Select ‘apply now’ from the menu.
- To buy LIC IPO shares at discounted rates, complete the payment option using UPI or any other online payment mechanism.
- The amount will be locked-in till the allotment is announced.
LIC IPO FAQ
When is the LIC IPO?
How many shares are being issued in the LIC IPO?
What is the price band for the issue?
What advantages do policyholders have in the LIC IPO?
How can I know if I am an eligible policyholder?
Check your Policy-PAN linking status on https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus
What discount do retail bidders & employees get?
What do I need to apply for the IPO?
What if I have multiple policies?
Can non-policyholders participate in the IPO?
Can a policyholder apply for IPO from someone else’s Demat Account?
How much percentage of shares of LIC IPO are reserved for Retail Quota?
How much percentage of shares of LIC IPO are reserved for QIB Quota?
How much percentage of shares of LIC IPO are reserved for NII Quota?
What is the lot size for LIC IPO?
What is the Minimum Amount for LIC IPO?
When will be shares of IPO alloted?
What id the LIC IPO Listing date?
What is the GMP of LIC IPO?
In recent months the government took several important steps to prepare for the LIC IPO including implementing legislative changes to the LIC Act, extending the term of office of incumbent LIC IPO chairman MM Kumar, whose term expires on Wednesday, and a good pay increase for employees. The government has also made the LIC Amendment Act part of the Finance Bill, which will introduce the necessary legislative changes before the IPO. The LIC is supervised by the Insurance Regulatory and Development Authority and is subject to the 1956 LIC Act, which allows it to obtain special powers in several fields, including for companies with high shareholdings.
The Department of Investment and Public Asset Management (DIPAM) that oversees government shares and public sector companies has selected the insurance company Milliman Advisors to determine the LIC’s embedded value. The company’s listing will discipline the company and give it access to financial markets to unlock its value.
The capital markets regulator SEBI has relaxed minimum standards for public offerings to pave the way for an IPO of LIC. The government has proposed increasing the authorized capital of the LIC to 25,000 rupees on March 7, 2021, at 0.202 hrs, and disbursing the company’s capital at 100 rupees. Under the changes proposed in the Finance Act 2021, LIC’s authorized share capital will be divided into 2,500 crore shares at 10 rupees each.
The Cabinet Committee on Economic Affairs ( CCEA ) has in principle approved the proposed IPO to preserve the government plans for a mega-IPO for the Insurance & Life Insurance Corporation of India (LIC) in the current financial year. In the post-union budget (FY21-22) the government has taken several legislative and executive steps to set the way for a mega-IPO.
The union’s finance minister, Nirmala Sitharaman, said the government’s stake in the public sector insurance company, Life Insurance Corporation of India (LIC), will remain with the company when the IPO is sold. Secretary Tuhin Kanta Pandey from the Department of Investment and Public Asset Management (DIPAM) reported that the good news is that LIC and LIC policyholders will come together for the LIC IPO and this will initiate the mega IPO. By March 2022, those who have invested money in the IPO are expected to have a chance to make money instead of waiting for investors.