Life Insurance Corporation of India IPO (LIC IPO)

LIC is the largest life insurer in India with a 64.1% market share in terms of Gross Written Premium (GWP), a 66.2% market share in terms of New Business Premium (NBP), a 74.6% market share in terms of the number of policies issued, an 81.1% market share in terms of the number of group policies issued for fiscal year 2021, as well as by the number of individual agents (1 .35 million), which comprised 55% of all individual agents in India as of March 31, 2021.

The company is the largest asset manager in India as of September 30, 2021, with AUM (comprising policyholder investment, shareholder investment and assets held to cover related liabilities) of INR39,558,929.24 million independently, which was more than 3.3 times the total AUM of all private life insurers in India and approximately 16.2 times more than the AUM of the second largest player in the Indian life insurance industry in terms of AUM.

The company’s brand, LIC, was recognized as the third strongest global insurance brand and the tenth most valuable according to the “2021 Insurance 100 Report” published by Brand Finance. As of September 30, 2021, its individual product portfolio in India comprised 32 individual products (17 participating products and 15 non-participating products) and seven individual clauses.

Competitive Strengths

  • India’s leading insurance provider and the fifth largest insurer in the world according to GWP.
  • A range of life insurance products to meet people’s diverse insurance needs.
  • Strong omnichannel distribution network; 1.34 million agents, 3,463 active Microinsurance agents, 174 alternate channels, etc.
  • India’s largest asset manager with an established track record of financial performance.
  • Highly experienced and qualified management team.

Key Positive Factors

  • LIC is part insurance company and part investment products company. Their plans are a combination of insurance and investment with a guaranteed return.
  • LIC has over 13.5 lakh agents playing and bringing in the bulk of new business. LIC plans offer “fixed returns” along with life insurance coverage. This makes it easier for agents to sell and gives insurers peace of mind.
  • LIC has high public trust for both life insurance and the investments made with it. LIC stands for Insurance in India.
  • LIC manages assets of Rs 39 lakh crores. That’s more money than the entire mutual fund industry combined. They invest these funds in stocks and bonds. They own 4% of all shares listed in India and more government bonds than the RBI.
  • India’s leading insurance provider and the fifth largest insurer in the world according to GWP.
  • A range of life insurance products to meet people’s diverse insurance needs.

Key Challenges

  • LIC has poor new policy growth as they continue to lose market share to private insurance players, especially in urban areas.
  • The margin on insurance + investment products is low.
  • It is very difficult to value LIC as the business model is different from any other company. LIC collects the money up front and then promises to compensate policyholders at a later stage. The premiums they collect (part insurance and part investment) cannot be recognized as income.

Company Promoters

  • President of India

Company Financials

ParticularsFor the year/period ended (₹ in Millions)
30-Sep-2131-Mar-2131-Mar-2031-Mar-19
Total Assets40,434,596.7037,464,044.6834,141,745.7433,663,346.17
Total Revenue15,197.2429,855.7127,309.5626,449.96
Profit After Tax15,040.1329,741.3927,104.7826,273.78

Objective Of The Issue

  • Neoliberalism
  • Privatization and allowing the general public to hold shares
  • Achieve a targeted divestment of 10% for the 2020-21 financial year
  • Meet working capital requirements

Life Insurance Corporation of India IPO Peer Comparison

S. No.Face ValueCompany NamePE
110SBI Life Insurance Company Limited81.46
210HDFC Life Insurance Company Limited94.26
310ICICI Prudential Life Insurance Company Limited81.83

Life Insurance Corporation of India IPO Risk

  • The ongoing COVID-19 outbreak could have a negative impact on all elements of your business.
  • Its trademark, reputation and perception are vital to its continued dominance in the Indian life insurance industry.
  • Adverse persistence measures or a negative change in persistence metrics could have a materially negative impact on your financial condition.
  • The volatility of interest rates can have a significant and negative impact on your profitability.
  • The practical difficulty of integrated value calculations is considerable.
  • Participating items provide a significant portion of your corporation’s overall new business premiums.
  • Your internal risk management policies, processes and controls, as well as the risk management tools at your disposal, may be insufficient or ineffective.
  • There are important legal proceedings pending against your Corporation.

Other Threats

  • In the future, they may be forced to inject additional funds into IDBI Bank.
  • They face tremendous competition, and if they can’t compete effectively, your business may suffer materially.
  • Adjustments in your Corporation’s surplus distribution strategy may reduce the attractiveness of your contributing products, thus harming your business.
  • If they are unable to obtain regulatory permits or maintain their current regulatory approvals or licenses, your business may suffer.
  • They are subject to various types of operational risks, the development of any of which could have a material detrimental effect on their business.
  • They are vulnerable to misconduct and fraud by their staff, which could damage their reputation.

Life Insurance Corporation of India IPO – Details

IPO Opening Date04 May 2022
IPO Closing Date09 May 2022
Issue TypeBook Built Issue IPO
Issue Size₹20,557.23 Crore
Face Value₹10 per equity share
IPO Price₹902 To ₹949 Per Equity Share
Market Lot15 Shares (1 Lot)
Min Order15 Shares
Listing AtBSE, NSE
RegisterLinkInTime India Private Limited
QIB Shares Offered50% of the net offer
Retail Shares Offered35% of the net offer
NII (HNI) Shares Offered15% of the net offer

LIC IPO Effective Price by Category

Investor CategoryEffective Price
QIBsRs 949
HNIsRs 949
RetailRs 904 (Rs 45 discount)
PolicyholdersRs 889 (Rs 60 discount)

LIC IPO Multiple Application

A LIC policyholder can apply for LIC IPO shares using 2 IPO applications in the following categories:

  1. Policyholder + Retail Category
  2. Policyholder + HNI (NII) Category

Life Insurance Corporation of India IPO – Date Schedule

IPO Open Date04 May 2022
IPO Close Date09 May 2022
Basis of Allotment Date12 May 2022
Initiation of Refunds13 May 2022
Credit of Shares to Demat Account16 May 2022
IPO Listing Date17 May 2022

Life Insurance Corporation of India IPO – Lots Size & Price

This is for Retail quota after discount price.

ApplicationLotsSharesAmount ( Cut-Off)
Minimum11513,560
Maximum142101,89,840

Promoter Holding

Pre Issue Share Holding100%
Post Issue Share Holding96.50%

Life Insurance Corporation of India IPO Prospectus

LIC IPO Recommendation

Angel Broking – Apply
Ashika Research – Apply
Axis Capital – Not Rated
BP Equities (BP Wealth) – Apply
Capital Market – May apply
Dilip Davda – Apply
Edelweiss Broking Ltd – Not Rated
Elara Capital Ltd – Not Rated
GEPL Capital Ltd – Apply
HDFC Securities Limited – Not Rated
Hem Securities – Apply
ICICI Direct – Not Rated
IIFL Securities – Apply
Investmentz Ltd – Apply
Jainam Broking limited – Apply
Jefferies Group – Not Rated
LKP Securities Ltd – Apply
Motilal Oswal – Apply
Nirmal Bang – Apply
TopShareBrokers.com – Apply
UBS Global – Not Rated
Ventura Securities Limited – Apply

Company Contact Information

Life Insurance Corporation of India
Yogakshema, Jeevan Bima Marg
Nariman Point, Mumbai 400 021,

Phone: +91 22 6659 8732
Email: [email protected]
Websitehttp://www.licindia.in/

Life Insurance Corporation of India IPO Registrar

KFin Technologies Private Limited
Selenium, Tower B, Plot No- 31 and 32
Gachibowli, Financial District
Nanakramguda, Serilingampally
Hyderabad 500 032
Telangana, India

Tel:  +91 40 6716 2222
E-mail: [email protected]
Website: https://karisma.kfintech.com/

Life Insurance Corporation of India IPO Lead Manager(s)

1. Axis Capital Limited
2. BofA Securities India Limited
3. Citigroup Global Markets India Private Limited
4. Goldman Sachs (India) Securities Private Limited
5. ICICI Securities Limited
6. J.P. Morgan India Private Limited
7. JM Financial Consultants Private Limited
8. Kotak Mahindra Capital Company Limited
9. Nomura Financial Advisory And Securities (India) Pvt Ltd
10. SBI Capital Markets Limited

Life Insurance Corporation of India IPO FAQs

When Life Insurance Corporation of India IPO will open?

The Life Insurance Corporation of India IPO dates are 04 May 2022 To 09 May 2022.

What is the lot size of Life Insurance Corporation of India IPO?

Life Insurance Corporation of India IPO lot size is 15 Shares and total amount is ₹13,560.

How to apply for Life Insurance Corporation of India IPO?

You can apply in Life Insurance Corporation of India IPO online using either UPI or ASBA as payment method. ASBA IPO application is available in the net banking of your bank account. UPI IPO application is offered by brokers who don’t offer banking services.

When is Life Insurance Corporation of India IPO listing date?

The Life Insurance Corporation of India IPO listing date is announced. The date of Life Insurance Corporation of India IPO listing is 17 may 2022.

Suggestion

  • Apply

Disclaimer: This post is only for education purposes. Consult your financial Advisor before investing your money.

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