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
| Particulars | For the year/period ended (₹ in Millions) | |||
|---|---|---|---|---|
| 30-Sep-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
| Total Assets | 40,434,596.70 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 |
| Total Revenue | 15,197.24 | 29,855.71 | 27,309.56 | 26,449.96 |
| Profit After Tax | 15,040.13 | 29,741.39 | 27,104.78 | 26,273.78 |
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 Value | Company Name | PE |
| 1 | 10 | SBI Life Insurance Company Limited | 81.46 |
| 2 | 10 | HDFC Life Insurance Company Limited | 94.26 |
| 3 | 10 | ICICI Prudential Life Insurance Company Limited | 81.83 |
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 Date | 04 May 2022 |
| IPO Closing Date | 09 May 2022 |
| Issue Type | Book Built Issue IPO |
| Issue Size | ₹20,557.23 Crore |
| Face Value | ₹10 per equity share |
| IPO Price | ₹902 To ₹949 Per Equity Share |
| Market Lot | 15 Shares (1 Lot) |
| Min Order | 15 Shares |
| Listing At | BSE, NSE |
| Register | LinkInTime India Private Limited |
| QIB Shares Offered | 50% of the net offer |
| Retail Shares Offered | 35% of the net offer |
| NII (HNI) Shares Offered | 15% of the net offer |
LIC IPO Effective Price by Category
| Investor Category | Effective Price |
|---|---|
| QIBs | Rs 949 |
| HNIs | Rs 949 |
| Retail | Rs 904 (Rs 45 discount) |
| Policyholders | Rs 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:
- Policyholder + Retail Category
- Policyholder + HNI (NII) Category
Life Insurance Corporation of India IPO – Date Schedule
| IPO Open Date | 04 May 2022 |
| IPO Close Date | 09 May 2022 |
| Basis of Allotment Date | 12 May 2022 |
| Initiation of Refunds | 13 May 2022 |
| Credit of Shares to Demat Account | 16 May 2022 |
| IPO Listing Date | 17 May 2022 |
Life Insurance Corporation of India IPO – Lots Size & Price
This is for Retail quota after discount price.
| Application | Lots | Shares | Amount ( Cut-Off) |
| Minimum | 1 | 15 | 13,560 |
| Maximum | 14 | 210 | 1,89,840 |
Promoter Holding
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding | 96.50% |
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: Investors@licindia.com Website: http://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: lic.ipo@kfintech.com 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.
Disclaimer: This post is only for education purposes. Consult your financial Advisor before investing your money.
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