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LIC IPO: Date, Price, Review, News, Application and Details!

Much to everyone’s excitement, the LIC IPO is finally here! At a size of ~Rs 20,000 cr., the IPO is the biggest in the country so far. Below we have discussed everything you need to know about LIC and the IPO to make a sound investment decision.

LIC IPO highlights

Here are important details about LIC IPO details in 10 points:

  1. Size: The government aims to raise Rs 21,008 cr. from the offer.
  2. Dates: The issue opens on 4 May 2022 and closes on 9 May 2022.
  3. Price: The price band is fixed at Rs 902 to Rs 949 per share.
  4. Discount: The government has announced a discount of Rs 60 per share to policyholders and Rs 45 for employees.
  5. Lot size: Each lot has 15 shares and an applicant can bid for a maximum of 14 lot.
  6. Listing: The shares will be listed on both NSE and BSE and the tentative date is 17 May 2022.
  7. Registrar: KFin Technologies Ltd is the official registrar of the LIC

Category-wise reservation of the IPO

The government has earmarked 10% of the issue for policyholders. A significant part is reserved for the employees of Life Insurance Corporation. Half of the remaining IPO issue is earmarked for qualified institutional buyers (QIBs), of which 60% has been set aside for anchor investors on a discretionary basis. 1/3 of the issue is reserved for the anchor investor and will be earmarked for domestic mutual funds. Finally, 15% will be allocated to non-institutional investors (NII) ~35% will be available to retail investors.

LIC IPO Highlights

LIC IPO important dates

About Life Insurance Corporation of India

True to its tagline — Zindagi ke saath bhi… Zindagi ke baad bhi…, LIC is India’s largest insurer and is government-run. It offers participating and non-participating insurance products, including saving insurance, term insurance, health insurance, unit-linked insurance products (ULIPs), and annuity and pension products.

Highlights of LIC

  1. It claims a market share of over 66.2% in new business premium.
  2. It boasts a market share of over 64.1% in terms of premiums.
  3. It has a total AUM of Rs 3,95,58,929.24 mn as of 30 September 2021.

Objects of the offer

  1. To offload a 3.5% stake in LIC for Rs 21,000 cr.
  2. To enjoy the benefits of listing.
  3. Carry out the Offer For Sale (OFS) by the selling shareholder — President of India, acting via the Ministry of Finance, Government of India.
  4. Enhance the company’s visibility and brand image.
  5. Provide a public market for its equity shares in India.

LIC IPO policyholder and employees special discount

The government of India has announced a discount for LIC policyholders and employees. As a policyholder, you can avail a discount of Rs 60 per equity share. However, only the policyholders who bought their policy on or before 13 April 2022 are eligible for this discount. Further, the company’s employees are eligible for a discount of Rs 45 per equity share.

Financial performance of LIC

  • LIC’s net premium income increased at a 9.30% CAGR from Rs 3,37,18,539.65 lakh in 2019 to Rs 4,02,84,434.43 lakh in 2021.
  • Its total revenue rose from Rs 5,60,78,439.38 lakh in FY 2019 to Rs 6,82,20,499.40 lakh in FY 2021.
  • The company’s profit after tax increased at a CAGR of 3.87% from Rs 2,68,849.66 lakh in FY 2019 to Rs 2,90,056.68 lakh in FY 2021.
  • LIC’s 13-month persistency ratio increased from 66% in FY 2019 to 67% in FY 2021 thereby suggesting growth in the policyholders who renewed their policies.
  • As of December 2021, the insurer’s market share for the New Business Premium segment stood at ~66%, significantly higher than the combined market share of its rivals.
  • LIC commands a market share of 74% in terms of the number of policies.
  • LIC clocked a 25% y-o-y growth in total APE (Annual Premium Equivalent).

Below is a table of LIC’s consolidated financials from FY 2019 to FY 2021.

Peer comparison

In addition to LIC, India’s insurance sector also has private players. Below is a table detailing LIC’s peers and their market cap.

  • Data as of 29 April 2022

Continue to read LIC SWOT analysis, prospects, and FAQs here.

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Aradhana Gotur

Aradhana Gotur

Lives in both own and parallel universes and loves nature, music, and words (that turn into actions)

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