LIC IPO – Check Issue Date, Price, Lot Size & Details

LIC, which stands for Life Insurance Corporation, is the largest insurance company in India. LIC also holds the largest portfolio of Assets Under Management (AUM). The company also holds more than 66.2% of the life insurance sector. In this article, we take a closer look at the LIC IPO Details and its possible future prospects.

The service portfolio of the company includes 32 individual products:

  • Sixteen participating insurance products along with the 16 non-participating products.
  • The company also provides unit-linked insurance products such as saving insurance, term insurance, annuity & pension, health insurance, etc.
  • The company also provides the same insurance service in the group rider category.

As per various reports, the AUM of the company is currently at a valuation of Rs. 39 lakh crores. LIC has its own 2048 branches that 113 divisional offices have governed along with 1,554 Satellite Offices. The company also has a presence in many foreign countries such as Fiji, Mauritius, Singapore, Bangladesh, UAE, Nepal, Qatar, Sri Lanka, Bahrain, Kuwait, and the United Kingdom.

LIC, through its business operation and Corporation’s omnichannel distribution and network platform, also operates individual services that comprise:

  • Individual Agents
  • Bancassurance Partners
  • There are alternate channels by operation through corporate agents, insurance marketing firms, and brokers.
  • Digital sales 
  • Micro Insurance agents 
  • Point of Sales via Persons-Life Insurance scheme.

LIC, through its business operation, has penetrated the domestic market. The company is the most trusted brand globally, justifying its catch lines “Jindagi Ke Saath Bhi, Jindagi Ke Baad Bhi”. LIC, in no doubt, has made every effort to make a better India with their motto of “Har Pal Aapke Saath” in a true sense. 

The Government of India announced the IPO plans of LIC in the Financial year Budget of 2020. Though finally, the IPO is coming up in 2022, as it took a while to calculate the perfect valuation along with the embedded and intrinsic Value of the company. Even after calculating the company’s valuations, the enormous size of the company makes it challenging for the company to carry out its comparison with the listed peers.

LIC initially came up with an offer that was yet for approval from the company’s board for an IPO offer of Rs. 68,000 crores but had to trim down the offered size to Rs finally. 21,000 crores due to the illiquid situation in global markets created due to the Russia-Ukraine war and the rising inflation that has slowed down the economy. With its IPO offer, the company will only carry out a dilution of around 3.5% of the equity of the company. 

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OBJECTS OF THE IPO ISSUE: 

  • To meet corporate targets. 
  • The company also intends to fund various investments.
  • The company intends to create shareholders’ wealth by listing the company’s equity shares on the stock exchange via an OFS offer of 221,374,920 Equity Shares of the company.

BASIS OF THE IPO OFFER:

The basis of the IPO offer been brought by the LIC is as follows:

  • LIC is the 5th biggest company globally that has been engaged in the sector of life insurance in terms of the GWP.
  • The company holds a majority market share, creating a virtual monopoly in the rapidly growing business sector in the country.
  • LIC will be highly benefited by the underserved and the undertone of the growth in the Indian life insurance business.
  • The company is a reliable brand, and the business model is a customer-focused business model.
  • The company operates on a cross cyclical product mix and fulfills its diversified client base’s wide range of requirements. It also manages an individual product portfolio driven by the participation of the life insurance plans.
  • The company has created its solid presence due to an unrivaled agency force, which has helped them create a wide network throughout PAN India.
  • LIC has now also carried out digitalization and modern technology to help their customers connect with the generation of operational advantages.
  • The company is India’s biggest asset manager. The company has also exhibited a proven track record of financial and operational performance with profitable margins.
  • LIC has a solid risk management structure.
  • LIC has been managed by a team of highly-seasoned and skilled persons. A solid corporate governance framework leads the governing council of the company.

LIC IPO DETAILS:

LIC came up with their IPO has been defined by DIPAM. The IPO is to meet the Government of India’s program of disinvestment. LIC is coming out with its maiden IPO of 221374920 equity shares to create wealth for the shareholders, with retail shareholders as a priority. The company decided their price band for the IPO with Rs. 902 to Rs. 949. Through this IPO, LIC will aim to raise funds of Rs. 21008.48 crores at the valuations of the upper price band. Check Day by Day IPO Subscription Details (Live Status)

LIC stated that it had reserved 22137492 equity shares in the IPO offer for its policyholders. LIC also stated that it would be offering its policyholders a discount of Rs. 60 per equity share. The company has also reserved another 1581249 equity shares in the IPO Offer for its Employees. Post allotment after the IPO, the company’s equity shares will be listed on BSE and NSE. The IPO issue of the LIC constitutes 3.50% of the post-IPO fully paid-up equity capital base of the Corporation.

The company also stated that it had issued initial equity at par after converting its dividends for FY20 into the equity capital base of the company. Post-IPO offer of the company, LIC’s fully paid-up equity capital base will remain at the same valuation of Rs. 6325.00 crore only as the IPO Offer of the company is a purely OFS offer. The company aims at a market capitalization of Rs. 600242.28 crores on the upper cap of IPO pricing.

LIC IPO Open DateMay 4, 2022 
LIC IPO Close DateMay 9, 2022
Issue TypeBook Built Issue type IPO
LIC IPO Face ValueRs. 10 per share
LIC IPO PriceRs. 902 – Rs. 949 per Equity Share
LIC IPO Lot SizeOne lot of 15 Equity Shares of the company
Minimum Order QuantityOne lot of 15 Equity Shares of the company
Minimum Order PriceRs. 14,235
Maximum Order Quantity14 lots corresponding to 210 Equity Shares of the company
Maximum Order PriceRs. 199,290
Issue Size221,374,920 equity shares of the company corresponds to about Rs. 21,008.48 Crores
Offer for Sale221,374,920 equity shares of the company corresponds to about Rs. 21,008.48 Crores
Retail DiscountRs 45 per equity share
Employee DiscountRs 45 per equity share
Listing AtBSE, NSE
QIB Shares OfferedNo more than 50% of the Net Offer as in IPO
Retail Shares OfferedNo less than 35% of the Net Offer as in IPO
NII (HNI) Shares OfferedNo less than 15% of the Net Offer as in IPO
Company PromotersThe President of India, acting through the Ministry of Finance, Government of India, is the company promoter.
Basis of AllotmentMay 12, 2022
Initiation of RefundsMay 13, 2022
Credit of Shares to DematMay 16, 2022
LIC IPO Listing DateMay 17, 2022
CategoryBidding atMax Bid AmountBasis of AllotmentDiscountFinal Price
HNIAt priceRs 9,067 CrProportionateNoRs 949
RetailCut-offNot above Rs 2 lakhsDraw of LotRs 45 per shareRs 904
EmployeeCut-offNot above Rs 2 lakhsProportionateRs 45 per shareRs 904
Policy HoldersCut-offNot above Rs 2 lakhsProportionateRs 60 per shareRs 889

LIC IPO Multiple Applications

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

  • Policyholder + Retail Category
  • Policyholder + HNI (NII) Category

Also Read : List of Upcoming SME IPO’s in India.

The advantage associated with the LIC IPO Limits in Reserved Quotas:

  • Rs 2 lakh investment limit has been there for the policyholders, employees, and the retail investor’s quota.
  • The Policyholders can further exercise and benefit from increasing limits by bidding in as the “policyholders + retail” quota by putting Rs 2 + 2 lakhs.
  • The company’s Employees can Increase limits by bidding in the IPO as an “employee + policyholders + retail” quota hence exercising an advantage of putting Rs 2+2+2 lakhs.
  • Policyholders get a discount of Rs. 60 per equity share on the final offer price as in the IPO.
  • The company also stated that it would give a discount of Rs. 45 per equity share in retail as well as employees’ quota.

COMPARISON WITH PEERS:

PeersTotal Premium of the company as in Rs. CroresEmbedded Value of the company as in Rs. CroresMarket capitalization of the company as in Rs. CroresMarket Capitalization of the company /Embedded Value
Life Insurance Corporation of IndiaRs. 4 Lakh CroresRs. 539000 CroresRs. 600000 Crores1.11
SBI Life Insurance Company LimitedRs. 50000 CroresRs. 30200 CroresRs. 110000 Crores3.64
HDFC Life Insurance Company LimitedRs. 38500 CroresRs. 29540 CroresRs. 123000 Crores4.164
ICICI Prudential Life Insurance Company LimitedRs. 35700 CroresRs. 30000 CroresRs. 75000 Crores2.5

LIC IPO PROMOTER HOLDING: 

The promoters of the LIC, Life Insurance Corporation of India, are as follows:

  • The President of India, acting through the Ministry of Finance, Government of India 
Pre – Issue Share Holding100%
Post Issue Share Holding96.50%

CONTACT DETAILS OF LIC:

Life Insurance Corporation of India
Yogakshema, Jeevan Bima Marg,
Nariman Point, Mumbai 400 021,
Maharashtra, India
Tel: +91 22 6659 8732
E-mail: Investors@licindia.com
Website: www.licindia.in

REGISTRAR OF THE LIC IPO:

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: www.kfintech.com

LEAD MANAGER(S) OF LIC IPO

  • Kotak Mahindra Capital Company Limited
  • Axis Capital Limited
  • Nomura Financial Advisory and Securities, India Private Limited
  • ICICI Securities Limited
  • JM Financial Limited
  • BofA Securities India Limited
  • Citigroup Global Markets India Private Limited
  • Goldman Sachs (India) Securities Private Limited
  • J.P. Morgan India Private Limited
  • SBI Capital Markets Limited
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