For people who want to grow financially and achieve economic sustainability, making investments in the stock market happens to be a great option. Investors, who are serious about what they do, always need to keep themselves informed about different investment opportunities and openings that can offer them maximum potential profitability and reduce their risk exposure.

More often than not, IPOs can be a great option for investments. In the Indian stock market, a new history is being made as one of the country's most prestigious and most significant organizations, LIC (Life Insurance Corporation of India) is coming out with an IPO for the first time. This article aims to provide our readers with detailed insight into the LIC IPO.

About LIC IPO

LIC happens to be India's biggest insurance company and the fifth-biggest insurance company globally. Until now, the Government of India holds 100% of the LIC. However, they have filed a DRHP (draft red herring prospectus) with the stock market regulator of India, the Securities and Exchange Board of India (SEBI). The idea is to sell 3.5% of the shares of LIC (earlier, it was looking to offload 5% of the shares) that the Government is currently holding. The Government intends to sell off these shares to investors and raise funds, and the subscription for this IPO will open between May 4 and May 9, 2022.

LIC as a firm is quite large, and the IPO will be India's largest IPO ever by a stretch. At present, LIC holds assets worth Rs. 36.7 trillion, which roughly converts to 491 billion USD. Considering the asset size, LIC ranks 10th amongst insurers around the world. The assets held by LIC also equate to approximately 16% of India's GDP. Moreover, LIC has more than 100,000 employees and an individual agents base, comprising over one million agents. It will not be an exaggeration to say that LIC is well and truly one of the market giants in India, and this IPO will indeed mark an era in the history of the country's financial markets.

IPO details

If you are an investor looking forward to this historic IPO, then there are a few key figures which you should take note of. By understanding the numerical data well, you can better judge whether you should invest in this IPO.

Valuation of LIC: The valuation of India's largest investor, LIC, stands at Rs. 6 lakh crores. The embedded value of LIC is Rs. 5.4 lakh crores. The EV is calculated by adding the present value of future profits and adjusted net asset value.

Issue size of LIC IPO:

The Government of India is looking to raise an approximate amount of Rs. 20,557 crore through the IPO against a 3.5% stake in the company. At first, it was projected that the Government would offer a 5% stake in the company for Rs. 60,000 crores.

The price band for LIC IPO: The Government of India is offering the shares of LIC at a price band of Rs. 902-949 per share. There are also discounts for policyholders, retail investors, and employees. While policyholders would get Rs. 60 off on the shares, retail investors and employees can avail of a discount of Rs. 40.

The lot size for LIC IPO: Investors looking to subscribe to the IPO can bid for shares in the company in a lot size of at least 15 shares and multiples of 15 after that. At the upper range of the price band, one single lot of LIC will be selling at Rs. 14,235, without any discount.

Reservations for shares at different levels: The LIC IPO offers a certain percentage of reserved shares to the employees, policyholders, qualified institutional buyers (QIBs), and non-institutional and retail investors. The amount of shares reserved for employees is 15.81 lakh. For policyholders, there is a reservation of 2.21 crore shares. From the net issue, 50% of the shares are reserved for QIBs, 15% are reserved for non-institutional investors, and the remaining 35% of shares are for retail investors.

Listing of shares: For investors whose subscription will be granted, shares will be allotted to them on May 12. Investors who do not get allotment of shares will get their refund on the next day, i.e. May 13. By May 16, successful bidders will have the shares credited to their respective Demat accounts. The LIC stock will be listed on the Stock Exchanges by May 17.

Financial assessment of LIC: By the end of financial year 2021, which ended on March 31, 2021, LIC had earned premiums worth Rs. 4,05,398.59 crore. Even in the pandemic hit economy, LIC had managed to grow. In the same financial year, LIC had earned Rs. 2,203,27.59 crore in renewal premiums, i.e. premiums received for the renewal of policies.

LIC had also managed to secure profits from their investments through interests, dividends, and rents. Meanwhile, the company's expenses had also increased because of an increase in the cost of operations. As a result, their costs stood at Rs. 35,162.22 crore by the end of 2021.

As for LIC's investments, some of the significant funds, companies, or institutions where they hold some percentage of stakes include –

• LIC Pension Fund, LIC Cards Services, LIC Insurance Corporation (Singapore): 100% stake
• IDBI Trusteeship Services: 29.84% stake, IDBI Bank: 49.24% stake.
• State Bank of India: 8.24%
• Bank of Maharashtra: 3.07%, etc.

How to apply

It simply does not go more significant than this – LIC coming with an IPO is one of the essential points in the financial history of this country. If you are an investor, you can be a part of this movement and add this prestigious organization to your investment portfolio.

Here's how you can apply for this IPO

Mobile Platform | RING Mobile App

• Login to the RING Mobile App & Navigate to Investing section
• Select IPO and Click on Apply Now

Web Platform | Swift Trade

• Log in to the platform from here
• Click on Place Order and then click on IPO
• Click on Apply

Dedicated Calling Facility | IVR

• Call on 022 - 61480808/41508080
• When calling from your registered number, press one and then press 3
• Follow the instructions communicated over the call

Whatsapp

Chat on WhatsApp at +91 8976900911 to apply

If you do not have an account with us, you can open an account from here and be ready before the IPO goes live.

Videos

You can watch the videos on "How you can apply for IPO" using our platforms to get started.

Apply through RING mobile

Apply for IPO using the UPI facility

Data Source: Red Herring Prospectus.

Axis Direct is a brand under which Axis Securities Limited offers its retail broking and investment services. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. This information is only for consumption by the client and such material should not be redistributed.Disclaimer & Statutory Information