8 Things You Should Know Before Investing In LIC IPO

In India, LIC is the country’s largest insurance firm. In new business premium, it has a market share of more than 66%. In addition to participating insurance products, the company also offers non-participating insurance products, such as unit-linked and savings products and term and health insurance.

It has a total AUM of Rs. 39 lakh crore as of 30 September 2021. As many as 1,554 Satellite Offices and 2048 branches make up the LIC’s network. Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom are just a few countries where it is currently operating.

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Positive aspects that are particularly notable:

  • LIC is a corporation that provides both insurance and investing services. Their products are a mix of insurance and investment with a predetermined profit.
  • LIC has more than 13.5 million agents, most of whom are responsible for bringing in new business. In addition to life insurance, LIC plans to provide ‘set returns.’ As a result, agents will have an easier time promoting it, and insurers will have fewer concerns.
  • Both life insurance and investment made via LIC are highly regarded by the public. In India, the word “insurance” is identical to LIC.
  • The LIC manages an asset base of Rs. 39,00,000,000 In total, the mutual fund sector makes more money than that. Investing in stocks and bonds is how these funds are spread out. They hold more government bonds than the Reserve Bank of India (RBI).
  • They are the leading insurance provider in India and the sixth-largest worldwide insurer by gross written premiums by volume.
  • Different life insurance options satisfy the demands of other people.

Key challenges

  • LIC has poor new policy growth as they continue losing market share to private insurance players, especially in urban areas.
  • The margin in insurance + investment products is low.
  • It’s tough to value LIC as the business model is unlike any other company. LIC collects money upfront and then promises to compensate policyholders at a later stage. As a result, the premiums they collect (part insurance and part investment) cannot be recognised as revenue.

Also Read: Paytm Money Enables Pre-Open IPO For LIC

Company Promoters:

The President of India, acting through the Ministry of Finance, Government of India, is the company promoter.

Company Financials:

ParticularsFor the year/period ended (₹ in Millions)
 31-Dec-2131-Mar-2131-Mar-2031-Mar-19
Total Assets40,907,867.7837,464,044.6834,141,745.7433,663,346.17
Profit After Tax17,153.1229,741.3927,104.7826,273.78

Objects of the Issue:

The IPO aims to utilise the net proceeds for the following purposes;

  1. To achieve the benefits of listing the equity shares on the stock exchange.
  2. To carry out an offer for sale of 221,374,920 shares by selling shareholders.

LIC IPO Details

IPO Opening DateMay 4, 2022
IPO Closing DateMay 9, 2022
Issue TypeBook Built Issue IPO
Face Value₹10 per equity share
IPO Price₹902 to ₹949 per equity share
Market Lot15 Shares
Min Order Quantity15 Shares
Listing AtBSE, NSE
Issue Size221,374,920 Eq Shares of ₹10
(aggregating up to ₹21,008.48 Cr)
Offer for Sale221,374,920 Eq Shares of ₹10
(aggregating up to ₹21,008.48 Cr)
Retail DiscountRs 45 per share
Employee DiscountRs 45 per share
QIB Shares OfferedNot more than 50% of the Net Offer
Retail Shares OfferedNo less than 35% of the Net Offer
NII (HNI) Shares OfferedNo less than 15% of the Net Offer

LIC IPO Tentative Timetable

The LIC IPO date is from May 4, 2022, to May 9, 2022. The bidding time is 10.00 A.M. to 5.00 P.M. The Cut-off time for UPI Mandate confirmation is 12 P.M. on the next day of issue closing day.

IPO Opening DateMay 4, 2022
IPO Closing DateMay 9, 2022
Basis of AllotmentMay 12, 2022
Initiation of RefundsMay 13, 2022
The credit of Shares to DematMay 16, 2022
IPO Listing DateMay 17, 2022

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LIC IPO Lot Size

The LIC IPO market lot size is 15 shares. A retail-individual investor can apply for up to 14 lots (210 shares or ₹199,290).

ApplicationLotsSharesAmount (Cut-off)
Minimum115₹14,235
Maximum14210₹199,290

LIC IPO Promoter Holding

Pre Issue Share Holding100%
Post Issue Share Holding96.50%

Is there a chance of listing gain in LIC IPO?

The listing gain in an IPO share depends on many factors:
Demand and supply of IPO shares on the day of listing
IPO shares pricing
The market situation on the day of listing
The need for IPO shares (IPO oversubscription)
Russia Ukraine conflict
It is not easy to predict listing gains in LIC IPO due to its large size. However, we have not seen such a large IPO in India before.

Is it reasonable to apply for LIC IPO?

At this moment, it’s tough to say. There are several variables to consider, including the issue price, discounts available, and market conditions on the day of listing.
The IPO share price can fluctuate significantly in several weeks of trading. Therefore, because one can make or lose a lot of money, a high-risk investment is considered.

When will LIC IPO open?

LIC IPO opens on May 4, 2022, and closes on May 9, 2022.

What is LIC IPO expected price?

The LIC IPO price is ₹902 to ₹949 per equity share. A discount of Rs 45 is offered to Retail Investors and Rs 60 to LIC Policyholders.
The effective price for LIC IPO shares at the upper price band will be Rs 949 for QIB and NII, Rs 904 for retail, and Rs 889 for Policyholders.

How to check if LIC policy is linked to PAN Number for LIC IPO?

You could check if your LIC policy is linked to your PAN by submitting an online request. Check PAN availability status in LIC Policy. You would need the following details to check:
LIC Policy Number
Date of Birth
PAN Number
If your policy is linked correctly, you will get a message like, “Your PAN details are available in our records as per input provided for the policy number.”

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