LIC is the largest life insurer in India with a 64.1% market share in terms of Gross Written Premium (GWP), a 66.2% market share in terms of New Business Premium (NBP), a 74.6% market share in terms of number of individual policies issued, an 81.1% market share in terms of number of group policies issued for Fiscal 2021, as well as by the number of individual agents (1.35 million), which comprised 55% of all individual agents in India as at March 31, 2021.
The company is the largest asset manager in India as at September 30, 2021, with AUM (comprising policyholders’ investment, shareholders’ investment and assets held to cover linked liabilities) of INR39,558,929.24 million on a standalone basis, which was more than 3.3 times the total AUM of all private life insurers in India and approximately 16.2 times more than the AUM of the second-largest player in the Indian life insurance industry in terms of AUM.
The company’s brand, LIC, was recognised as the third strongest and 10th most valuable global insurance brand as per the “Insurance 100 2021 report” released by Brand Finance. As at September 30, 2021, its individual product portfolio in India comprised 32 individual products (17 participating products and 15 non-participating products) and seven individual riders.
Competitive Strengths
- Leading insurance provider company in India and fifth largest global insurer by GWP.
- A range of life insurance products to meet varied insurance needs of individuals.
- Strong omni-channel distribution network; 1.34 million agents, 3463 active Micro insurance agents, 174 alternate channel, etc.
- Largest asset manager in India with established financial performance track record.
- Highly experienced and qualified management team.
Key Positive Factors
- LIC is a part insurance and part investment products company. Their plans are a combination of insurance and investment with a guaranteed return.
- LIC has over 13.5 lakh agents who play brings most of the new business. LIC plans offer ‘fixed returns’ along with life insurance coverage. This makes it easy to sell by agents and brings peace of mind to the insurers.
- LIC has high trust in the public for both life insurance as well as investment done with them. LIC is synonymous with insurance in India.
- LIC manage asset of Rs 39 lakh crores. That is more money than the entire mutual fund industry combined. They invest these funds across stocks and bonds. They own 4% of all listed stocks in India and more government bonds than the RBI.
- Leading insurance provider company in India and fifth largest global insurer by GWP.
- A range of life insurance products to meet varied insurance needs of individuals.
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 very difficult 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. The premiums they collect (part insurance and part investment) cannot be recognized as revenue.
Company Promoters
- President of India
Company Financials
| Particulars | For the year/period ended (₹ in Millions) | |||
|---|---|---|---|---|
| 30-Sep-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |
| Total Assets | 40,434,596.70 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 |
| Total Revenue | 15,197.24 | 29,855.71 | 27,309.56 | 26,449.96 |
| Profit After Tax | 15,040.13 | 29,741.39 | 27,104.78 | 26,273.78 |
Object Of The Issue
1. Neo-liberalism
2. Privatization and allowing general public to hold stakes
3. Achieve targeted disinvestment of 10% for the financial year 2020-21
3. Fulfill the Working capital requirements
Life Insurance Corporation of India IPO Peer Comparison
| S. No. | Face Value | Company Name | PE |
| 1 | 10 | SBI Life Insurance Company Limited | 81.46 |
| 2 | 10 | HDFC Life Insurance Company Limited | 94.26 |
| 3 | 10 | ICICI Prudential Life Insurance Company Limited | 81.83 |
Life Insurance Corporation of India IPO Risk
- The ongoing COVID-19 outbreak could have a negative impact on all elements of their business.
- Their trademark, reputation, and perception are vital to their continued dominance in the Indian life insurance sector.
- Adverse persistency measures or a negative variation in persistency metrics could have a materially negative impact on their financial state.
- Interest rate volatility can have a significant and negative impact on their profitability.
- The practical difficulty of integrated value calculations is considerable.
- Participating items provide a major share of their corporation’s overall new business premiums.
- Their risk management policies, processes, and internal controls, and also the risk management instruments at their disposal, may be insufficient or ineffective.
- There are important legal processes pending against their Corporation.
Other Threats
- In the future, they may be obliged to inject additional funds into IDBI Bank.
- They confront tremendous competition, and if they are incapable to compete effectively, their business may suffer materially.
- Adjustments in their Corporation’s surplus distribution strategy may lower the appeal of their contributing products, thus harming their business.
- If they are unable to secure regulatory permissions or maintain their present regulatory approvals or licences, their business may suffer.
- They are subject to several sorts of operational risks, the development of any of which could have a major detrimental effect on their business.
- They are vulnerable to malfeasance and fraud by their staff, which could harm their reputation.
Life Insurance Corporation of India IPO – Details
| IPO Opening Date | 04 May 2022 |
| IPO Closing Date | 09 May 2022 |
| Issue Type | Book Built Issue IPO |
| Issue Size | ₹20,557.23 Crore |
| Face Value | ₹10 per equity share |
| IPO Price | ₹902 To ₹949 Per Equity Share |
| Market Lot | 15 Shares (1 Lot) |
| Min Order | 15 Shares |
| Listing At | BSE, NSE |
| Register | LinkInTime India Private Limited |
| QIB Shares Offered | 50% of the net offer |
| Retail Shares Offered | 35% of the net offer |
| NII (HNI) Shares Offered | 15% of the net offer |
LIC IPO Effective Price by Category
| Investor Category | Effective Price |
|---|---|
| QIBs | Rs 949 |
| HNIs | Rs 949 |
| Retail | Rs 904 (Rs 45 discount) |
| Policyholders | Rs 889 (Rs 60 discount) |
LIC IPO Multiple Application
A LIC policyholder can apply for LIC IPO shares using 2 IPO applications in the following categories:
- Policyholder + Retail Category
- Policyholder + HNI (NII) Category
Life Insurance Corporation of India IPO – Date Schedule
| IPO Open Date | 04 May 2022 |
| IPO Close Date | 09 May 2022 |
| Basis of Allotment Date | 12 May 2022 |
| Initiation of Refunds | 13 May 2022 |
| Credit of Shares to Demat Account | 16 May 2022 |
| IPO Listing Date | 17 May 2022 |
Life Insurance Corporation of India IPO – Lots Size & Price
This is for Retail quota after discount price.
| Application | Lots | Shares | Amount ( Cut-Off) |
| Minimum | 1 | 15 | 13,560 |
| Maximum | 14 | 210 | 1,89,840 |
Promoter Holding
| Pre Issue Share Holding | 100% |
| Post Issue Share Holding | 96.50% |
Useful Articles
LIC Policyholder(s) IPO Reservation – Explained
Life Insurance Corporation of India IPO Prospectus
Company Contact Information
| Life Insurance Corporation of India Yogakshema, Jeevan Bima Marg Nariman Point, Mumbai 400 021, Phone: +91 22 6659 8732 Email: Investors@licindia.com Website: http://www.licindia.in/ |
Life Insurance Corporation of India IPO Registrar
| KFin Technologies Private Limited Selenium, Tower B, Plot No- 31 and 32 Gachibowli, Financial District Nanakramguda, Serilingampally Hyderabad 500 032 Telangana, India Tel: +91 40 6716 2222 E-mail: lic.ipo@kfintech.com Website: https://karisma.kfintech.com/ |
Life Insurance Corporation of India IPO Lead Manager(s)
| 1. Axis Capital Limited 2. BofA Securities India Limited 3. Citigroup Global Markets India Private Limited 4. Goldman Sachs (India) Securities Private Limited 5. ICICI Securities Limited 6. J.P. Morgan India Private Limited 7. JM Financial Consultants Private Limited 8. Kotak Mahindra Capital Company Limited 9. Nomura Financial Advisory And Securities (India) Pvt Ltd 10. SBI Capital Markets Limited |
Life Insurance Corporation of India IPO FAQs
| When Life Insurance Corporation of India IPO will open? The Life Insurance Corporation of India IPO dates are 04 May 2022 To 09 May 2022. |
| What is the lot size of Life Insurance Corporation of India IPO? Life Insurance Corporation of India IPO lot size is 15 Shares and total amount is ₹13,560. |
| How to apply for Life Insurance Corporation of India IPO? You can apply in Life Insurance Corporation of India IPO online using either UPI or ASBA as payment method. ASBA IPO application is available in the net banking of your bank account. UPI IPO application is offered by brokers who don’t offer banking services. |
| When is Life Insurance Corporation of India IPO listing date? The Life Insurance Corporation of India IPO listing date is announced. The date of Life Insurance Corporation of India IPO listing is 17 may 2022. |
