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Life Insurance Corporation of India plans to raise Rs 21,000 crore through initial public offering (IPO). The subscription for the IPO will begin on May 4 and will end on May 9, 2022. The government has fixed a price band of Rs 902-949 per share and the face value of each equity share is Rs 10.
The IPO comprises of only Offer For Sale of 221,374,920 equity shares. LIC policyholders will get a discount of Rs 60 per equity share to the final issue price and retail participant will get a discount of Rs 45 apiece to the final issue price.
Company Summary
Life Insurance Corporation is a state-owned company, which has been providing life insurance in India for more than 65 years.
LIC as a brand was recognised as the third strongest and 10th most valuable global insurance brand as per the “Insurance 100 2021 report” released by Brand Finance.
It is the largest life insurer in India, with a 64.1% market share in terms of Gross Written Premium (or GWP), a 66.2% market share in terms of new business premium (or NBP), a 74.6% market share in terms of number of individual policies issued, a 81.1% market share in terms of number of group policies issued for fiscal 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at March 31, 2021, according to Crisil report.
For fiscal 2021, LIC issued approximately 21 million individual policies in India, representing approximately 75% market share in new individual policy issuances.
Company Products and Operations
The company has a slew of participating insurance products and non-participating products insurance products which include savings insurance products, term insurance products, health insurance products, annuity and pension products and unit linked insurance products.
The company’s individual products include specially designed products for specific segments, such as special products for women and children and Micro Insurance products. In addition, they also offer provide additional benefits along with the base product to cover for additional risks, such as accidental disability, death, critical illness and premium waiver on the death of the proposer.
As at September 30, 2021, their individual product portfolio in India comprised of 32 different products – 17 participating products and 15 non-participating products – and seven individual riders.
LIC group products comprise of group term insurance products, group savings insurance products; group savings pension products; and group annuity products. As at September 30, 2021, our Corporation’s group product portfolio in India comprised 10 group products.
LIC’s omni-channel distribution platform for individual products currently comprises of (i) individual agents, (ii) bancassurance partners, (iii) alternate channels (corporate agents, brokers and insurance marketing firms), (iv) digital sales (through a portal on our Corporation’s website), (v) Micro Insurance agents and (vi) Point of Sales Persons-Life Insurance scheme.
LIC has the largest individual agent network among life insurance entities in India, comprising approximately 1.35 million individual agents as at March 31, 2021, which was 7.2 times the number of individual agents of the second largest life insurer, according to Crisil.
As at September 30, 2021, our LIC had 2,048 branch offices and 1,554 satellite offices in India, covering 91% of all districts in India.
LIC’s operations are present in India and it has one branch in each of Fiji, Mauritius and the United Kingdom and subsidiaries in Bahrain with operations in Qatar, Kuwait, Oman and the United Arab Emirates, Bangladesh, Nepal, Singapore and Sri Lanka.
Company Financials
Particulars | For the year/period ended (Rs in millions) | |||
9M FY22 | FY21 | FY20 | FY19 | |
Total Assets | 40,907,867.78 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 |
Total Income | 5,122,792.05 | 7,037,094.45 | 6,456,054.72 | 5,708,095.70 |
Profit After Tax | 17,153.12 | 29,741.39 | 27,104.78 | 26,273.78 |
Company Strengths
- Fifth largest life insurer globally by Gross Written Premium and the largest player in the fast growing and under-penetrated Indian life insurance sector.
- Trusted and well-established brand as well as a customer-centric business model.
- Cross-cyclical product mix that caters to diverse consumer needs and an individual product portfolio that is dominated by participating life insurance policies.
- Presence across India through an omni-channel distribution network with an unparalleled agency force.
- Harnessing technology capabilities to support customer connect and drive operating efficiencies.
- Largest asset manager in India with an established track record of financial performance and profitable growth.
- Robust risk management framework.
- Highly experienced and qualified management team, distinguished Board and strong corporate governance framework.
Company Promoters
President of India acting through the Ministry of Finance, Government of India, is the promoter of the company.
Purpose of the IPO
- To achieve the benefits of listing the equity shares on the stock exchanges.
- To carry out the Offer for Sale of up to 221,374,920 equity shares by the selling shareholder.
IPO Details
IPO Opening Date | 04-May-22 |
IPO Closing Date | 09-May-22 |
Issue Type | Book Built Issue IPO |
Face Value | Rs 10 per equity share |
IPO Price | Rs 902 to Rs 949 per equity share |
Market Lot | 15 Shares |
Minimum Order Quantity | 15 Shares |
Listing At | BSE, NSE |
IPO Lot Size
Application | Lots | Shares | Amount (Cut-off) |
Minimum | 1 | 15 | Rs 14,235 |
Maximum | 14 | 210 | Rs 199,290 |
IPO Allotment Details
Life Insurance Corporation of India’s IPO allotment date is on May 12, 2022 and expected initiation of refund is on May 13, 2022. The shares are likely to be listed on the exchanges on May 17, 2022.
You can check your allotment in BSE or KFin Technologies