The Securities and Exchange Board of India on April 25 gave its nod to the updated draft red herring prospectus, which lists a 3.5 percent stake sale instead of 5 percent as mentioned in the previous draft papers, CNBC TV18 had reported.The Securities and Exchange Board of India on April 25 gave its nod to the updated draft red herring prospectus, which lists a 3.5 percent stake sale instead of 5 percent as mentioned in the previous draft papers, CNBC TV18 had reported.
LIC IPO is set to open on May 2 for anchor investors and for subscription on May 4, and close on May 9.
Employees and retail investors will be given a Rs 45/share discount, while LIC policyholders will get Rs 60/share discount. The earlier valuation expected around Rs 17 lakh crore , Now its proposed to be around Rs 6 lakh crore based on the revised Pricing of the Ipo .
Besides policyholders and shareholders, the remaining shares will be allocated thus: 50 percent for qualified institutional buyers (QIBs), 35 percent for retail buyers and 15 percent for non-institutional investor . There will be no green shoe option in the IPO.
At the new rate, the government could raise $2.61 billion at the lower end of the price band.Life Insurance Corp Of India (LIC) will become the country's fifth most-valued listed firm, with a market cap of over Rs 6 trillion, according to calculations by Moneycontrol.
LIC is the eighth largest life insurer globally in terms of total assets. As of fiscal 2021, it holds around $507.33 billion in total assets. Currently, China's Ping An Insurance is the largest insurer in terms of total assets, followed by Germany's Allianz SE and France-based AXA SA.
The LIC IPO will contribute a major chunk to the budgeted disinvestment proceeds for the current fiscal. The government has pegged its disinvestment receipts at Rs 65,000 crore for FY2022-23, up from Rs 13,531 crore mopped up last fiscal. This giant has network of over 13 lakh individual agents, serving nearly 29 crore policyholders, LIC held a market share of 61.6 percent in new business premium collections as of January 2022 .
As pre the Survey 2021-2022, life insurance penetration rose to 3.2 percent in 2020, which is close to the global average. The industry is expected to average an annual growth rate of 5.3 percent between 2019 and 2023.
Life Insurance of Corporation India (LIC) could be among the cheapest valued insurers worldwide going by the expected Initial Public Offer (IPO) price of ₹902-949 per share. It stands out at 1.11 times of its embedded value compared to 0.21 of China Insurance or 0.54 of Ping An Insurance.
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Brokers said activity in the unofficial grey market is picking up ahead of the IPO. LIC is currently trading at a premium of ₹38 per share over its likely issue price in the grey market.
At the speculated IPO price, LIC would be the fifth-largest life insurer in terms of market capitalisation. In Fiscal 2021, LIC had a Return on Equity (RoE) of 82% - the highest amongst its global peers. The RoEs of rivals such as Ping An Insurance, Aviva PLC, and China Life were between 11% and 20%.
So with all these details what you should Do ? apply or not !
Many brokerage firms believes that after the revised valuation and some stability in the market after the begining of the ukraine - russia war , Invsetors response may be good . Also discount offered to retail and policy holders will help in getting flow of subscriptions from this segment . In over all terms if the market remains good during the listing period of the Ipo analysts feel that decent listing gain can be there . But most of them suggest to have long term view as the over all industry has vast scope to penetrate indian markets .
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