February 13, 2022
LIC IPO: If you are also going to invest in LIC IPO Policy
CRISIL’s report states that LIC IPO effect on Policy Holders 82 percent return on equity is much higher than other major insurance companies in the world.
Preparations have begun to launch the country’s biggest IPO. The company has filed draft red herring prospects (DRHP) with SEBI on February 13. The government will sell 4.99% stake of the company’s post offer paid-up share capital. LIC is going to be the biggest LIC IPO of the country. The government has submitted the DRHP on February 13. Accordingly, the Government of India will issue 31.62 crore shares. According to DRHP, the Asset Under Management (AUM) of LIC IPO as of September 2021 is Rs 39.6 lakh crore.
Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), said that LIC’s IPO is purely an offer for sale (OFS). No fresh issue will be issued in this. “The government is going to sell its 5% stake by issuing 31.6 crore shares,” Pandey said.
Government will remain the owner of LIC IPO
It is the largest life insurance company in the country. The government wants to raise around Rs 90,000 crore by selling stake in this company. This will help the government in meeting the disinvestment target of the current financial year
Apart from this, the government cannot sell more than 25 percent of its stake in LIC during 5 years.
LIC has highest market share
LIC has a market share of 64.1%. According to a report by Crisil, it is the largest life insurance company in the country.
LIC IPO: DRHP of country’s largest LIC IPO handed over to SEBI, government will sell 5% stake
The CRISIL report states that LIC’s 82 per cent return on equity is much higher than other major insurance companies in the world. Chinese insurer Ping has a return on equity of 19.5 per cent, while that of Aviva is 14.8 per cent.
LIC IPO New Business Premium Growth Superb
LIC’s profit after tax stood at Rs 1,437 crore in the first half of the financial year 2021-22. Its profit stood at Rs 6.14 crore in the same period a year ago. LIC’s new business premium grew at 554.1 per cent in the first half of this financial year. It is the sixth largest insurance company in the world in terms of total assets with $522 billion.
LIC IPO effect on Policy Holders will be the largest listed company in the country
According to London-based Brand Finance, the market value of LIC is estimated to reach 43 lakh crores this year. It is expected to increase to Rs 58.9 lakh crore in the next five years i.e. by 2027. In this way, it can remain the largest company in the country for the next several years.
TCS is second in this regard, with a valuation of more than Rs 14 lakh crore.
