The over Rs 21,000 crore LIC IPO will likely be out there for subscription until Monday, Could 9, 2022, and the value band of the corporate has been fastened at Rs 902-949 per share.
LIC is the nation’s oldest and largest life insurance coverage agency. It was fashioned by merging and nationalizing 245 personal life insurance coverage corporations on September 1, 1956, with an preliminary capital of Rs 5 crore. LIC now manages round Rs 40 lakh crore property and is the fifth-largest life insurer globally and the most important asset supervisor within the nation.
As of December 31, 2021, it coated 91 per cent of all districts and had 1.33 million particular person brokers, and had a market share of 61.6 per cent by way of premiums or GWP, 61.4 per cent by way of New Enterprise Premium, 71.8 per cent by way of variety of particular person insurance policies issued, and 88.8 per cent by way of variety of group insurance policies.
It’s owned by the central authorities which can promote 22.13 crore (22,13,74,920) shares or 3.5 per cent of its stake in LIC by the general public providing. The IPO is solely an offer-for-sale (OFS) and the federal government plans on elevating over Rs 21,000 crore by the sale.
The scale of the IPO was reduce from Rs 65,000 crore to Rs 21,000 crore because the Russian invasion of Ukraine and sustained promoting by international portfolio buyers (a web of Rs 1,48,078 crore for the reason that starting of December 2021) affected the inventory markets. Regardless of this, LIC IPO would be the largest public provide within the nation surpassing final 12 months’s Paytm IPO which garnered Rs 18,300 crore.
in the course of the announcement of the IPO final week, the corporate introduced a Low cost of Rs 60 per share for its policyholders and Rs 45 a chunk for retail buyers and LIC staff.
Half of the problem dimension has been reserved for certified institutional patrons (QIBs), 35 per cent for retail buyers and the remaining 15 per cent for non-institutional buyers.
Traders who want to subscribe to LIC IPO can bid in a number of 15 fairness shares and multiples thereafter. On the higher value band, they are going to be shelling out Rs 14,235 (excluding reductions) to get a single lot of LIC. The shares will likely be listed on each BSE in addition to the Nationwide Inventory Change (NSE).
The candidates additionally should be aware that the cut-off time for UPI mandate affirmation is Tuesday, Could 10, 2021, as much as 12:00 pm. In the event that they fail to take action then their utility is probably not thought of.
Kotak Mahindra Capital Firm, Axis Capital, BofA Securities India, Citigroup World Markets India, Nomura Monetary Advisory and Securities India, Goldman Sachs India Securities, ICICI Securities, JM Monetary, JP Morgan India and SBI Capital Markets are the guide working lead managers to the provide whereas KFin Applied sciences is the registrar of the problem.
Earlier than heading into the IPO, the anchor portion will open for subscription at present, Could 2, 2022.
The analysis groups at Geojit Monetary Companies, Anand Rathi Share and Inventory Brokers and Reliance Securities of their respective IPO notes have really helpful a “Subscribe” to the provide.
Geojit Analysis in its report famous “On the higher value band of Rs 949, LIC is out there at P/EVPS (Embedded Worth Per Share) of 1.1x which is at a reduction of 65 per cent in comparison with the typical valuation of personal life insurance coverage gamers. Although headwinds like declining market share, decrease short-term persistency ratios and sub-par margins demand a reduction to personal gamers, the present valuation is engaging contemplating its sturdy market presence, enchancment in profitability as a consequence of modifications in surplus distribution norms and robust sector development outlook. Therefore, we assign a “Subscribe” score on a brief to medium time period foundation.”
Reliance Securities in its IPO report mentioned, “Regardless of LIC writing hundreds of thousands of insurance coverage insurance policies, the insurance coverage premium-to-GDP ratio in India is at 3.7 per cent, nicely beneath the worldwide common of seven.2 per cent. The IPO is valued at a Value/Embedded Worth of 1.1x on the upper band on its 2QFY22 EV, which is at a big low cost in comparison with the P/EV for listed personal life insurance coverage corporations. HDFC Life Insurance coverage is buying and selling at a P/EV of 4.1x, SBI Life at 2.9x, and ICICI Pru Life at 2.2x. LIC has a various portfolio of insurance coverage and funding merchandise to cater to the wants of people. The corporate is well-placed owing to its omni-channel distribution community comprising of 1.33mn brokers, a number of companions and alternate channels, its trusted “LIC” model worth, and 65 years of lineage. Furthermore, LIC is backed by its sturdy monetary observe report and skilled administration crew. In view of the large market share, largest property below administration, sturdy model, numerous portfolio of merchandise, and valuation consolation, we advocate SUBSCRIBE to the problem.”
The share allotment is more likely to happen on Thursday, Could 12, 2022, and the shares are anticipated to be listed on Tuesday, Could 17, 2022, in keeping with the timeline given within the pink herring prospectus (RHP).