The most important IPO within the historical past of the Indin inventory market is right here. On this article, we are going to check out LIP IPO Overview 2022 and focus on probably the most awaited mega IPO of the Life Insurance coverage Company of India. The IPO will open for subscription on Might 4th, 2022, and shut on Might ninth, 2022. The corporate goes for an Supply for Sale of Rs 21,008.48 Cr. Hold studying to seek out out extra concerning the IPO!
LIC IPO Overview 2022- Concerning the firm
Life Insurance coverage Company of India is likely one of the oldest and largest insurance coverage suppliers serving for greater than 65 years in India. It’s the solely public insurance coverage participant within the nation.
LIC has 2,048 department places of work and 1,559 satellite tv for pc places of work in India, masking 91% of all districts in India. It additionally has a world presence in international locations like Fiji, Mauritius, United Kingdom, Qatar, Kuwait, Oman, United Arab Emirates, Bangladesh, Nepal, Singapore, and Sri Lanka.
The corporate has a 61.6% market share when it comes to premiums (or GWP) and a 61.4% market share when it comes to New Enterprise Premium (or NBP). Along with that, it holds a 71.8% market share when it comes to numerous particular person insurance policies issued and an 88.8% market share when it comes to numerous group insurance policies as of December 31, 2021.
As of December 31, 2021, LIC is the biggest asset supervisor in India with a complete AUM (comprising policyholders’ funding, shareholders’ funding, and belongings held to cowl linked liabilities) of ₹40.1 trillion on a standalone foundation.
Aside from that, LIC’s investments in listed fairness represented round 4% of the whole market capitalization of NSE as of December 31, 2021.
Monetary Highlights of LIC
LIC generated a Web Revenue of Rs 29,741.39 Cr within the final monetary 12 months ending March 31, 2021. Within the present monetary 12 months, i.e. 9 months interval that ended on December 31, 2021, LIC has generated a web Revenue After Tax of Rs 17,153.12 Cr. Here’s a fast snapshot of the LIC Monetary as shared by the corporate in its DRHP:
LIC Monetary Comparability with the friends
LIC IPO Overview 2022- Business Overview
The insurance coverage trade in India noticed speedy progress from the 12 months 2016. It was primarily as a result of elevated consciousness and shift within the mindset of individuals in the direction of insurance coverage. The entire life insurance coverage premium grew at a strong 12% CAGR from Fiscals 2016 to 2020, which was a lot quicker than the 6% annual progress witnessed in India’s nominal GDP throughout that interval.
The scale of the Indian life insurance coverage trade was ₹6.2 trillion on a total-premium foundation in Fiscal 2021, up from ₹5.7 trillion in Fiscal 2020. The trade’s whole premium has grown at 11% CAGR within the 5 years ended Fiscal 2021. CRISIL Analysis forecasts the trade’s whole premium to develop at 14-15% CAGR over the subsequent 5 years, to succeed in near ₹12.4 trillion by Fiscal 2026.
Particular Provisions for LIC IPO
The Life Insurance coverage Company of India has provide you with a particular provision for its policyholders. Being the biggest insurance coverage participant within the nation, the corporate has made a particular reservation of 10 % of the problem measurement for policyholders.
A reduction of Rs 60 per fairness share is to be supplied to the eligible policyholders bidding from the policyholder reservation portion.
Strengths of the Firm
- LIC holds the title of being the fifth largest firm globally when it comes to life insurance coverage GWP and tenth globally when it comes to whole belongings and thus is a trusted model title.
- The corporate has diversified into numerous segments and has a Cross-cyclical product combine and is known as a component insurance coverage firm and half funding firm.
- LIC has a pan India presence with the biggest and strongest community connection having greater than 1.33 million particular person brokers.
- The corporate has modified its enterprise technologically and has a number of apps, portals,s, and web sites to cater to the wants of its clients.
- To handle its threat effectively, the corporate has a diversified its investments into numerous asset courses.
- LIC has a extremely skilled and certified administration staff, a distinguished Board, and a robust company governance framework.
Weaknesses of the Firm
- LIC is an organization ruled by the Life Insurance coverage Company Act and never the Firms Act. Subsequently, the shareholders may have fewer rights.
- The covid 19 brought about a variety of disruption of their enterprise because the agent’s actions had been restricted and the bills incurred to maneuver to new applied sciences had been considerably larger.
- The corporate’s enterprise is strongly pushed by its model title and any unfavourable publicity can have antagonistic results on its enterprise.
- LIC’s belongings and liabilities are extremely depending on the rates of interest. Any change within the charges as a result of financial elements can have an effect on profitability.
- The persistency ratio is the variety of whole insurance policies that an insurer has to the insurance policies which can be renewed or in drive. Any sudden withdrawal of coverage by a big group of individuals can have an effect on the enterprise.
LIC IPO Overview- Gray Market Data
The shares of LIC traded at a premium of 8.96% within the gray market on Might 2nd. The shares tarded at Rs 1034. This provides it a premium of Rs 85 per share over the cap worth of Rs 949.
LIC IPO Overview- Key IPO Data
Promoter: President of India, performing by the Ministry of Finance, Authorities of India.
Guide Operating Lead Managers: Kotak Mahindra Capital Firm Restricted, Axis Capital Restricted, BofA Securities India Restricted, Citigroup International Markets India Non-public Restricted, Nomura Monetary Advisory and Securities (India) Non-public Restricted, Goldman Sachs (India) Securities Non-public Restricted, ICICI Securities Restricted, JM Monetary Restricted, J.P. Morgan India Non-public Restricted, and SBI Capital Markets Restricted.
Registrar: KFin Applied sciences Restricted
| Particulars | Particulars |
|---|---|
| IPO Dimension | ₹21,008.48 Cr |
| Recent Concern | – |
| Supply for Sale (OFS) | ₹21,008.48 Cr |
| Opening date | Might 4, 2022 |
| Time limit | Might 9, 2022 |
| Face Worth | ₹10 per share |
| Value Band | ₹902 to ₹949 per share |
| Lot Dimension | 15 Shares |
| Minimal Lot Dimension | 1 (15 shares) |
| Most Lot Dimension | 14 ( 210 shares) |
| Itemizing Date | Might 17, 2022 |
The Goal of the Concern
The web proceeds of the supply shall be used to:
- Obtain the advantages of itemizing the Fairness Shares on the Inventory Exchanges
- Perform the Supply for Sale of as much as 221,374,920 Fairness Shares by the Promoting Shareholder
In Closing
On this article, we regarded on the particulars of LIC evaluate 2022. Being the largest IPO within the Indian Share market historical past, it may be a chance to look into the corporate and apply for the IPO after analyzing its strengths and weaknesses.
Analysts stay divided on the IPO and its potential beneficial properties. Brokering homes corresponding to GEPL Capital, Investmentz Ltd and Ventura Securities restricted have assigned a purchase ranking for the IPO. Wanting into the IPO measurement, the probabilities of the IPO traders getting itemizing beneficial properties is minimal. Nevertheless, in the long run, LIC being the chief in its trade could also be price checking into.
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