The recent years have been a blockbuster time for IPOs in India with companies raising Rs.1,18,704 crores through 63 IPOs in the year 2021 alone. Even amidst all this success, a large portion of investors are waiting for one of the most important IPOs in recent history – LIC’s. But there is good news for all those who are waiting as reports say that India’s largest life insurance provider is preparing its draft red herring prospectus to be published by the end of January 2022, so that investors can understand the financials and fundamentals of the now government-owned company. 

If you wish to learn more about the LIC IPO and all the buzz around it, you can find all the necessary details in this reading. To know more keep reading.

LIC IPO - What is so special about LIC IPO?

It is expected that LIC IPO will be the largest IPO ever in India. LIC as an insurer company holds the top position in India and has a market share of 69% in FY20. In the FY20 LIC collected first-year premiums of Rs. 1.78 trillion which is 25.17% more than the previous fiscal year. The major stakes in LIC are held by the Indian government which is about 95% and is worth Rs. 34 trillion.

Keeping in mind the current situation of the banking sector due to the COVID-19 pandemic such a move was much needed to revive the BFSI sector. Listing such a prominent company will only help the BFSI sector attract many investors. The Indian government is planning to raise Rs. 1.75 crore from asset sales which makes this the largest IPO launch in history.

Growth Story of LIC India

In the year 1956 LIC established 5 zonal offices with 33 divisional offices and 212 Branch offices. As of today, LIC operates with 8 zonal offices, 113 divisional offices, and 2048 digitally well-equipped branch offices, and 1381 satellite offices across the country.

In partnership with various banks and financial institutions the company also offers an online premium collection facility to the policyholders.

On the business front, LIC grew from Rs. 200 crore of business in 1956 to Rs. 1000 crore in 1968-70. As recent in 2019-20 the business collected around 2.19 lakh new individual policies with a first-year premium income of Rs. 51227.83 crore.

Interesting Facts about LIC India

• The GDP contribution of LIC is 7%

• The number of LIC agents recorded in 2019 was 11,79,229

• If the LIC IPO launches it will become India’s most valued company

• In October 2019 LIC had a market share of 70.9% whereas the private insurer held 29.1%

• In 2019 LIC settled 26 million claims

Things to Know about LIC IPO - The largest IPO in Indian History

Following are commonly asked questions about the LIC IPO. Read below to know more details about the LIC IPO.

• LIC IPO Date - When LIC IPO will come?

During the Financial Budget 2021 it was announced that LIC will launch an IPO in 2021. The Indian government has appointed Deloitte as the pre-initial public offer (IPO) transaction advisors. The IPO launch was slowed down due to the pandemic, but the post-COVID government will kick start the process in full swing. There are no official dates announced yet, hence once the pre-IPO phase is completed only then we will know about the IPO launch dates.

• LIC IPO Size - What will be the LIC IPO lot size?

It is said that the Indian government will not sell more than 10% of its stake in LIC. Many experts and analysts estimated that the valuation will go up to Rs. 8 lakh crores to Rs. 11 lakh crores. But having said we all have to wait for information from official sources as these are just the estimates.

• LIC IPO Share Price - What will be the LIC IPO price?

There are no speculations of the price yet as the price will be dependent on the valuation and share price offered by the competitors in the insurance market. The issue price will be announced one week prior when the issue becomes available for public subscription.

• LIC IPO Valuation - What is the valuation of LIC?

As mentioned earlier based on estimates by the experts the valuation of LIC can be between Rs. 8 lakhs to 11 lakhs crores. Nothing is official and determining the actual valuation of LIC is going to be tricky given the size of the company.

• LIC IPO Allotment & Listing

The Indian government also has plans for LIC policyholders and there is news that up 10% of the shares will be reserved for them. Before the IPO launch around one crore, DEMAT accounts will be open as the majority of the LIC policyholders don’t have a DEMAT account. In the LIC IPO allotment and listing documents, you will get information related to share allocations. This document is published by the registrar of the IPO. You can also know about the demand for the IPO in this document.

How to apply for LIC IPO?

Like every other IPO investor can apply for LIC IPO through any stockbroking firms or banks that have ASBA service.

LIC India – Business Objectives

• Making people aware across the country about the life insurances especially to the socially and economically backward classes.

• Induce savings discipline in people and attract them with insurance-linked savings

• Making business grow while keeping in mind that the funds belong to the policyholders

What are the advantages of the upcoming LIC IPO?

• As LIC is a top company in the insurance industry it will give chance to the individual investors to build corpus with LIC

• With LIC IPO the operations and governance of insurers will become more transparent

• LIC IPO launch will attract many retail investors and foreign investors as well

• As the government has decided only to sell 10% of the stakes, it allows the Indian government to retain full control over the operations

Key Takeaways

• As it is a PSU there will be certain restrictions on LIC

• As mentioned earlier LIC is the largest state-owned company and the largest investor too

• Also, the policyholders will have the special privilege as 10% will be reserved for them

LIC IPO FAQs

1. How will the LIC IPO impact the employees?

There are no final details but the employees of LIC IPO may have a special reservation and even they can invest in the LIC IPO.

2. How will the LIC IPO impact the existing policyholders?

There will be no impact on the existing policyholders.

3. Will the LIC IPO benefit the existing policyholders?

Yes, the existing policyholders will benefit from the IPO launch as the operations will become more transparent. Another benefit is that the policyholders will get a chance to invest in the company.

4. How to apply for LIC IPO via Edelweiss?

Follow the below-mentioned steps to apply for LIC IPO through Edelweiss:

• Visit the ASBA enabled online banking portal of Edelweiss

• Click on investment sections and then on IPO/e-IPO section

• If you are already registered, you can directly click on Invest in IPO. If not registered, then you must complete the applicant registration.

• Fill in your required bank details and verify the same and then click on Invest in IPO

• Select the IPO you want to invest in

• Fill the required Edelweiss DP details

• Fill in the number of shares and bid price and to complete click on ‘apply now’

5. How to buy LIC IPO?

Investors can buy LIC IPO using UPI or United Payment Interface, an online payment method.

6. Do You Need a Demat Account to apply for LIC IPO?

Yes, it is mandatory that you should have a Demat account to invest in LIC IPO.

Open a Demat account with us and start your investment journey today!

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