Facts about LIC
● LIFE INSURANCE CORPORATION OF INDIA is India’s BIGGEST life insurer
● LIC is a household name in India
● LIC has announced an INITIAL PUBLIC OFFERING (IPO)
● This is India’s biggest ever PUBLIC ISSUE
●LIC has 286 million policies
● 1,15000 employees
● 1.34 million individual agents
● LIC has more than 2000 branches
● LIC has a 64.1% market share in terms of premium
● 66.2% market share in terms of new business premium
● LIC can boast of 528 billion dollars of assets, more than the entire mutual fund industry. Also, 3.3 times more than the entire assets of private insurance companies.
WHY HAS THE GOVERNMENT OF INDIA DECIDED TO LAUNCH THE IPO
● The Government of India owns 100% of LIC
● According to LIC, the Government is selling 5% of its equity shares which is 316 million shares
● The sale is needed to raise funds to meet the Government’s economic policy objectives.
● The Draft Prospectus has put LIC’s embedded value at 71.3 billion dollars
● LIC is India’s most valuable company. The Government will be able to raise 14.25 billion dollars by selling 5% stake.
● Also, as the Government has increased the FDI share in the insurance sector, there is an impending threat of foreign players capturing the market share.
WHAT HAS THE GOVERNMENT ANNOUNCED
● The Government has launched an aggressive advertising campaign to promote the upcoming IPO, so that it reaches as many as possible.
● The IPO is likely to be launched in March 2022.
● The Government sees this IPO as a test of investors appetite.
● The Government is very hopeful of the success of this IPO due to the brand value of LIC
● 10% of the shares will be reserved for the policyholders.
● This way, millions of LIC shareholders will get a chance to invest.
● Many are going to be first time investors and don’t know how to go about it.
● The Policyholders can apply for the shares in the policyholders quota.
● They have to update their PAN Card details and link it with their LIC policy.
● The Government has asked the Policy holders to open DMAT Accounts.
● As many policyholders are not comfortable with technology, they can get the paperwork done by their agents.
● It is an exciting time for Policy holders, as many will be first time investors and will get a chance to own a part of LIC
● 5% shares will be reserved for the employees
● 35% shares will be offered to retail investors.
The Government is likely to announce the IPO by mid March 2022
LIC IPO| LIC | How to invest |Policy holders of LIC |Employees of LIC |retail investor
Sources: Economic Times, Money Control
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Finally the LIC IPO has opened up for Retail investors.
The Retail investors can bid for shares from the 5th of May 2022 to the 9th of May 2022.
Share allotment will be announced on the 12th of May2022 and those who have not got the shares will get the money back in their accounts.
What is being offered?
● Retail Investors can bid for shares and get a discount of ₹45 per share.
● Employees will also get a discount of ₹45 per share.
● Policyholders will get a discount of ₹60 per share.
Share Pricing:
● The Government is offering the LIC shares in the price band of ₹ 902 to ₹949 per share.
● LIC shares will be listed on the BSE and NSE on the 17th of May2022.
How to apply?
● Applicants can apply in lots.
● 1 lot equals 15 shares.
● A person can bid for a maximum of 14 lots of 210 shares.
● Minimum investment will be of ₹14235
● A maximum investment cap of ₹ 2 lakh is applicable.