Life Insurance Corporation of India (LIC) is expected to open on May 4 for IPO application. The offer will be open until May 9 to subscribe.
Here are 9 things you need to know if you want to invest in LIC’s IPO:
- LIC IPO will be the largest IPO in the history of the Indian capital market. It is expected to raise Rs 21,000 through it.
- The government will sell 3.5 per cent stake in its owned insurance company through about 22 crore shares.
- LIC with IPO will be valued at Rs 6 lakh crore. As per September 30, 2021, LIC has an embedded value of Rs 5.4 crore, according to international actuarial firm Milliman Advisors. A consolidated shareholder value of an insurance company is calculated from the embedded value.
- The government had last week filed a draft paper with the market regulator SEBI seeking exemption on condition that it sells 5 per cent stake if it is a mandatory condition for a company with a value of over Rs 1 lakh crore.
- LIC has reserved 5 per cent of the issue size for policyholders and 10 per cent for employees and they also plan to offer IPO at a discount. According to the news, policyholders and employees are expected to get 5-10 percent discount. LIC has reserved 35 per cent of the total IPO size for retail investors.
- The government had earlier handed over the draft paper to SEBI in February. It had planned to raise about Rs 65,000 crore by selling 5 per cent stake with a market value of Rs 12 lakh crore.
- LIC’s IPO will be a significant contribution to the government’s proposed disinvestment target in the current financial year. The government has set a disinvestment target of Rs 65,000 crore for the financial year 2022-23, if Rs 13,531 crore is collected from the last financial year.
- With 13 lakh agents, LIC is serving around 29 crore policyholders. LIC has 61.6% market share in new business premium collections till January 2022.
- According to the Economic Review 2021-22, the reach of life insurance increased by 3.2% in 2022. According to a report, its annual growth rate is projected to be 5.3 percent between 2019 and 2023.