LIC IPO is one of the most awaitedIPOs in India as investors are vying to be a part of this government-regulatedinsurance company of India. Set up in 1956, LIC has come a long way by offering a wide portfolio of insurance services to the citizens.
LIC is known to have a vast networkof insurance agents who cater to the multi-faceted insurance needs of peopleall across the country. As per a report by Life Insurance Council, the number of LIC agents were standing at around 14 lakh as compared to 11 lakh agents of private insurance service providers on March 31, 2021. This clearly shows the vastness of LIC in the insurance space. As per LIC’s yearly report, the insurance pioneer has a market share of nearly 70% in the country’s life insurance domain.
From the above information, itbecomes clear why traders and investors have been eagerly waiting for LIC IPO.The life insurance leader is hoping to raise around 1 lakh crore through this public issue. If you are looking for the upcoming IPO in India, here is something important you must need to know.
As traders and investors across thecountry wait for the massive public offer of Life Insurance Corporation in thelatter part of the year, LIC policyholders who have purchased over 28.9 crore policies, now have a reason to elate in regard to this upcoming IPO in India. The government has confirmed that up to 10% of the public issue lot in the IPO would be set aside for LIC policyholders. There may be an offering of discount on the floor price.
According to the LIC (Amendment)Rules, “any reservation made by the Corporation in favor of its policyholderson a reasonable basis in a public issue under Clause (a) of sub-section (9) of Section 5 must be made in a manner alike that appropriate for a reservation on a competitive basis for workers in a public issue under any directive made and circular released by the Securities and Exchange Board of India.”
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The government has also said that itmay split the LIC IPO into two parts and release them with a gap of few months.The objective behind this exercise is to ensure smooth processing of IPO as the market may not feature the required capacity to embrace such an enormous IPO.
If this happens, it will be the firstof its kind of IPO in India. In another first-time initiative by agovernment-owned business in the country, LIC is looking forward to offering pre-IPO share assignments to focus on investors and marquee asset managers.
Another option being prearranged isto choose share placement before the launch of the IPO, a change that publicly-ownedbusinesses typically don’t prefer. According to the best stock broker in India, possible traders and investors for the pre-IPO contribution will be inclusive of mainstay investors, marquee asset managers, independent wealth reserves and private equity funds.
In the present context of theupcoming IPO in India, the introduction of LIC IPO is going to be a massiveevent that may have a lasting influence on the markets. This is why government doesn’t want to take any chance and move cautiously with the launch of LIC IPO. This is why the LIC IPO is going to be released in two parts to make it easier and smoother for the markets to adopt it. For those looking to make both short-term and long-term gains through the stock market, investing in LIC IPO is surely a great decision.
FAQs
What is the release date of LIC IPO?
There has been no firm announcementon the release date of the LIC IPO in India. The opening date can only be knownafter the filing of DRHP by LIC.
How the valuation of LIC will bedone?
This is going to be a mountainoustask as there is no value-based data available as of now. However, a back-endestimation based on its existing AUM and the fresh business premium recommend an assessment of nearly ₹7-8 Lakh crore.
Why there is so much hype about LICIPO?
LIC carries an AUM (Asset UnderManagement) of nearly ₹31 Lakh crore. With 25 life insurance firms in India,LIC enjoys a market share of an enormous 70%. The company got first-year premiums of ₹1.78 lakh crore in FY-2020, which was much higher than the previous year. LIC is the biggest institutional investor in India, with a consolidated investment of around ₹120 Lakh crore.
