Investing in LIC IPO
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LIC IPO Details
About LIC of India
Life Insurance Corporation LIC is one of the well-known government-owned insurance companies. It was established in the year 1956 and ruled monopoly in the insurance segment till the 1990s. After this, the government opened up the insurance segment for the private sector. LIC is a merger of around 245 insurance companies in India. Moreover, it has 2,048 branches all over India and its zonal offices are situated in major cities like Delhi, Chennai, Mumbai, Kolkata, Kanpur, Patna, Bhopal and Hyderabad according to the current data.It also has 113 Divisional Offices, 1178 Mini Offices and 1526 Satellite Offices.
According to the DRHP filed government has decided to sell 5% of its stakes. The company is planning to get listed on NSE and BSE stock exchanges. Moreover, the IPO is a major part of the government disinvestment in LIC. The current plan is to raise a fund of 80,000 to 1 lakh crore, to which LIC IPO will contribute.
Aside from the speculation on the basis of the DRHP, there is a reserved quota in the IPO for the policyholder that is upto 10% and for employees, it is 5%.
LIC IPO Strength
- The annual report states that the Lic market share related to the insurance segment is around 69%.
- The other business segments they deal in is the LIC Housing Finance, LIC Mutual Fund, LIC Pension Fund, LIC Cards Services. Moreover, the company has acquired the IDBI bank in 2019.
- The fiscal year 2018-19 the company total asset volume was around Rs 31.11 lakh crore.
- In the year 2018-19 premium received was around 2 lakh crore.
- The investment volume the company had was around Rs 29.84 lakh crore in the year 2019, this includes the investments in debt and equity
- It is the largest insurer with a 68.9 percent market share in the new business premium collection and 60.9 per cent in annual premium collection
- Lic has a great network of agents till 2021 there are 13.53 lakh agents. If this stat is compared to other 20 private life insurers which have a total of around 11.01 lakh agents, LIC stands alone with the most agents.
- The other plans that are offered are life insurance plans, endowment plans, whole life plans, money back plans, term insurance plans and insurance riders.
- The employee base is also huge currently it is around 1.14 lakh
- The operations carried out are directly from the foreign branch offices i.e. in Fiji (Suva and Lautoka). Moreover, they are also handling from Mauritius (Port Louis) and the United Kingdom (Wembley).
Risks involved in the LIC IPO
- There are other private players in the competition and offer better service to policyholders.
- There is a certain restriction being a Public sector Undertaking.
List of LIC's Investee Companies
LIC is one of the biggest investors in India. It has bought shares worth Rs. 90,000 crores in the fiscal year 2021. By the end of this fiscal year, they are aiming to invest Rs. 8 lakh crores.
|Stock||Quantity Held||Holding %|
|Bank Of Baroda||248,334,291||4.80%|
|PTC India Ltd.||17,654,072||5.96%|
|ABB Power Products And Systems India Ltd.||1,881,348||4.44%|
|Indian Overseas Bank||228,087,493||1.21%|
|Reliance Infrastructure Ltd.||6,989,930||2.68%|
|ABB India Ltd.||8,376,287||3.95%|
|Aditya Birla Capital Ltd.||51,407,882||2.13%|
|Hindustan Zinc Ltd.||96,246,636||2.28%|
|Aban Offshore Ltd.||1,000,000||1.71%|
|Titan Company Ltd.||35,163,104||3.96%|
How to apply for LIC IPO?
Here are the easy steps that you need to follow for the application of the upcoming LIC IPO.
- Log in with your Demat account with the credentials provided.
- Once the login is done go to the IPO section.
- Set the details related to the bidding and then confirm the order.
- You can modify the bid accordingly and confirm the final bid.
- Confirm detail and then click on ok, your order will then be executed.
You need a Demat account for the application of the LIC IPO. If you don’t have a Demat account you can apply to Open a Demat account here.
LIC IPO FAQ
In this IPO the government of India is all set to reduce its holding in the LIC. The reduction will take place through the IPO launch in 2022. It will result in transparency and efficiency.
According to the speculations the IPO is expected to hit the primary market in the month of March till the 10th. The process of the announcement is underway, the dates will be announced once everything is confirmed.
If you are an existing policyholder you need to link your policy with the pan card. This can be easily done via the Lic website and you can ask your policy agent to do so.
Aside from the pan card link, you need to have a Demat account which is mandatory if you are looking to invest in LIC IPO. Another required thing is a UPI ID which should be linked to the bank. The account should have sufficient funds too.
The sovereign will be maintained as ensured by the government of India. There can be slight changes to the life corporation act 1956. The impact on policyholders is yet to be seen.
The lot size and the minimum quantity is yet to be announced. Once the draft is clear then there are chances of the announcement for the same.
The registrar details are yet to be disclosed.
Yes, there is a reservation of 10% for the existing policy holder according to the DRHP filed. This increases the chances for the allotment for the policyholders
There is no impact on the current employees. On the other hand, employees will get a 5% special quota to invest in the LIC IPO.
The privatization fear of the government selling their 5% stock made the speculation but there will be no change or impact. The company will still qualify as a government-owned firm and will not be viewed in the privatization and there will be no impact on the employees.
The merchant bankers for the upcoming IPO are yet to be decided by the central government.
According to the reports, the investors participating in the upcoming LIC IPO are Retail individuals, NIB, and QIB. These are the Expected categories to participate in.