LIC IPO – Life Insurance Corporation of India IPO

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i. Life Insurance Corporation of India has been providing life insurance in India for more than 65 years and is the largest life insurer in India, with a 64.1% market share in terms of premiums (or GWP), a 66.2% market share in terms of New Business Premium (or NBP), a 74.6% market share in terms of a number of individual policies issued, an 81.1% market share in terms of a number of group policies issued for Fiscal 2021.

ii. LIC is ranked fifth globally by life insurance GWP and 10th globally in terms of total assets. LIC Corporation is the largest asset manager in India with an AUM (comprising policyholders’ investment, shareholders’ investment and assets held to cover linked liabilities) of ₹39,558,929.24 million on a standalone basis, which was:

(i) more than 3.3 times the total AUM of all private life insurers in India,
(ii) approximately 16.2 times more than the AUM of the second-largest player in the Indian life insurance industry in terms of AUM,
(iii) more than 1.1 times the entire Indian mutual fund industry’s AUM and
(iv) 18.5% of India’s annualized GDP for Fiscal 2022.

LIC individual products comprise
(i) participating insurance products and
(ii) non-participating products, which include
a. savings insurance products
b. term insurance products
c. health insurance products
d. annuity and pension products
e. unit-linked insurance products

LIC Corporation’s omni-channel distribution platform for individual products currently comprises
(i) individual agents,
(ii) bancassurance partners,
(iii) alternate channels (corporate agents, brokers, and insurance marketing firms),
(iv) digital sales (through a portal on the Corporation’s website),
(v) Micro Insurance agents and
(vi) Point of Sales Persons-Life Insurance scheme.

Competitive Strengths
i. Fifth largest Life Insurer globally.
ii. Trusted brand and a customer-centric business model
iii. Presence across India through an omnichannel distribution network with an unparalleled agency force.
iv. Largest asset manager in India with an established track record of financial performance and profitable growth

Objects of the LIC IPO – Life Insurance Corporation of India IPO:

The objects of the Offer are to (i) achieve the benefits of listing the Equity Shares on the Stock Exchanges; and (ii) carry out the Offer for Sale of up to 316,249,885 Equity Shares by the Selling Shareholder r (President of India, acting through the Ministry of Finance, Government of India).
DRHP of LIC IPO – Life Insurance Corporation of India IPO
RHP of LIC IPO – Life Insurance Corporation of India IPO

LIC IPO – Life Insurance Corporation of India IPO Details:

Open Date: May 04 2022
Close Date: May 09 2022
Total Shares: 221,374,920
Face Value: ₹ 10 Per Equity Share
Issue Size: 21,008.48 Cr.
Lot Size: 15 Shares
Issue Price: ₹ 902 - 949 Per Equity Share
Listing At: NSE,BSE
Listing Date: May 17 2022

Promoters And Management:

i. Debi Prasanna Mohanty is the Executive Director (Audit) and Chief Internal Auditor of the Corporation. He holds a bachelor’s degree in arts from the Ravenshaw College, Cuttack and a master’s degree in arts from Utkal University. He joined the Corporation on April 17, 1984 and has worked in various offices of the Corporation in different capacities. He has previously held various other positions, such as, additional executive director (audit), executive director (information technology – business process reengineering), chief (marketing), amongst others. During Fiscal 2021, he received a remuneration of ₹3.63 million. ii. Arun Kumar Anand is the Executive Director (investment operations) and Chief Investment Officer of the Corporation. He holds a bachelor’s degree in science and has also completed a post graduate degree in Economics from Agra University, Uttar Pradesh. Previously, he has held various other positions in the Corporation and has also been the chief of investment operations of the Corporation. He joined the Corporation on April 17, 1984. During Fiscal 2021, he received a remuneration of ₹ 3.60 million^. iii. Muraleedharan Purushothaman is the Executive Director – marketing/ product development and chief marketing officer of the Corporation. He holds a bachelor’s degree in science from the Faculty of Science, University of Kerala and a master’s degree in arts from the University of Kerala. He joined the Corporation on November 1, 1985. He has also held several other positions in the Corporation, including senior divisional manager in-charge, regional manager (marketing), additional executive director (marketing) and was also the CEO of Life Insurance Corporation (Nepal) Ltd. During Fiscal 2021, he received a remuneration of ₹3.47 million^.

Financials of LIC IPO – Life Insurance Corporation of India IPO:

Particulars (in crores) March 31, 2021 March 31, 2020 March 31, 2019
Income 2962 2695 2599
Expenses 5.2 12.4 2.6
Profit/(Loss) before tax 2980 2718 2642
Taxation 6.2 8 14.9
Dividend 15.1 2699 2725
Transfer to General Reserve 2900 14.9 27.9
Profit 1,12.8 63.2 68.5
EPS 4.7 4.29 4.15

Comparison With Peers:

Peers Total Premium (Cr) Embedded Value ( Cr) Mcap (Cr) Mcap/Embedded Value
Life Insurance Corporation of India ~4 Lakh 539000 600000 1.11
SBI Life Insurance Company Limited ~50000 30200 110000 3.64
HDFC Life Insurance Company Limited ~38500 29540 123000 4.164
ICICI Prudential Life Insurance Company Limited ~35700 30000 75000 2.5

Recommendation on LIC IPO – Life Insurance Corporation of India IPO:

Review and Recommendation of  LIC IPO by InvestorZone is 5/10 1. LIC is the most trusted and the Fifth largest life insurer globally by GWP and the largest player in the fast growing and under-penetrated Indian life insurance sector. 2. It sells LIC Policies via Online and Offline mode. However, most of the business of LIC comes from 13 lakh agents who sell individually on the behalf of LIC. 3. Having said all positive things, the LIC is continuously loosing market share from private players. This is the reason of concern going forward. 4. As far as market is concerned, India is still very under penetrated market for Insurance. Less than 4% population takes insurance. So, growth opportunity is huge. 5. On Valuation front, government done a wonderful job and with hefty discounts to retailers and policy holders, the valuation has become more attractive. Currently, it is the cheapest among all the listed life insurance players in the market. So, 10-15% listing gain might happen in the company.

Lead Manager of LIC IPO – Life Insurance Corporation of India IPO:

  1. Axis Capital Limited
  2. BofA Securities India Limited
  3. Citigroup Global Markets India Private Limited
  4. Goldman Sachs (India) Securities Private Limited
  5. ICICI Securities Limited
  6. J.P. Morgan India Private Limited
  7. JM Financial Consultants Private Limited
  8. Kotak Mahindra Capital Company Limited
  9. Nomura Financial Advisory And Securities (India) Private Limited
  10. SBI Capital Markets Limited

Registrar of LIC IPO – Life Insurance Corporation of India IPO:

  1. Kfin Technology Private Limited

Company Address:

Life Insurance Corporation of India (LIC) Yogakshema, Jeevan Bima Marg Nariman Point, Mumbai 400 021, Phone: +91 22 6659 8732 Email: Investors@licindia.com Website: http://www.licindia.in/

Discussion on LIC IPO – Life Insurance Corporation of India IPO:

14 Comments

    I HAVE APPLIED IN POLICYHOLDER CATEGORY THROUGH ASBA BUT THEN WHY DID I GET ALLOTMENT IN RETAIL ? CAUSE OF THAT NOW I HAVE RECEIVED ONLY Rs45 OF DISCOUNT.

    Reply

    Can someone give the total number of applications received under Retail category with source reference?

    Reply

    Can anyone explain
    Why the embedded value is 5.4 lakh cr when the premium collected is 4lkah cr and margins are only 10%, growth is only 7%

    When the private players with better growth and margin profile command only 30000 cr embedded value on premium collection of 40000 cr

    Reply

    Umesh sir,
    If I have amount of just 1 lot (15k)
    Which is best way to apply
    Retail or
    Policy holder
    I am eligible for both.
    Thank you.

    Reply

      As per current situation I think you should apply for retail. Policy holder subscription is already subscribed 4.25 times and it will be alloted on proportionate basis

      Reply

    DEAR SIR, PLS SHARE UR RECOMMENDATION FOR THIS IPO, AND PLS HELP ME FOR THE FOLLOWING…
    SHD I APPLY TWO APPLICATION ? ONE IN RETAIL INDIVIDUAL AND SECOND IN POLICYHOLDER?
    IF SO THEN CAN I USE SAME DEMAT ACCOUNT NO OR SHD I PUT TWO DIFFERENT DEMAT ACCOUNTS?

    Reply

    What should be the strategy for applying for this IPO which would increase chance of allotment?

    Reply

      It is a big IPO, so chances of allotment are very high.

      Reply

      DEAR SIR, PLS SHARE UR RECOMMENDATION FOR THIS IPO, AND PLS HELP ME FOR THE FOLLOWING…
      SHD I APPLY TWO APPLICATION ? ONE IN RETAIL INDIVIDUAL AND SECOND IN POLICYHOLDER?
      IF SO THEN CAN I USE SAME DEMAT ACCOUNT NO OR SHD I PUT TWO DIFFERENT DEMAT ACCOUNTS?

      Reply

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