After some delay due to the negative impact of the Russia-Ukraine war on stock markets, the Initial Public Offering (IPO) of India’s largest life insurance company – Life Insurance Corporation (LIC) of India – is scheduled to open on May 4, 2022. The IPO window will close on May 9, 2022.
The offer size of the LIC IPO is up to Rs 20,557 crore and the price band is from Rs 902 to Rs 949, with the lot size of 15 shares and in multiples thereof.
The good news for retail investors planning to invest in LIC IPO is that a discount of Rs 45 per share is being offered to retail individual bidders and also to eligible Employees.
It’s even better for the LIC policyholders, as a discount of Rs 60 per share is being offered to eligible policyholders bidding in the Policyholder Reservation Portion.
So, the retail bidders and eligible employees can apply in price band of Rs 857 – Rs 904, while the eligible policyholders can apply in price band of Rs 842 – Rs 889.
The LIC of India has issued approximately 2,10,000 individual policies in India and has about 75 per cent market share in new individual policy issuances.
In December 2021, LIC’s portal had 1,86,000 registered users and the Corporation’s mobile app had 51,300 registered users.
Moreover, ‘Brand LIC’ was recognised as the third strongest and tenth most valuable global insurance brand in 2021, as per the “Insurance 100 2021” report released by Brand Finance.
With over Rs 20 lakh crore invested in debt instruments, dependency on interest rate fluctuations may affect profitability of LIC of India.
If actual claims experienced and other parameters deviate from the assumptions used in pricing products and setting reserves, it could have a material adverse effect on business.