IPO Update: LIC IPO expected to launch in late April; Know expected date, discount, anchor investors, and other details

The Life Insurance Corporation of India (LIC), the country’s largest life insurance firm, is ready to go public (IPO). In FY 2022, it has sold over 2 crore 17 lakh policies in India, or to 41 policies sold every minute.

LIC is planning an initial public offering (IPO) in the first quarter of this fiscal year, with an embedded value of Rs.5.4 lakh crore as of September 30.

The first-year premium climbed by 8% to close to Rs.2 lakh crore in the financial year 2023, i.e. Rs.1 lakh 98 thousand crore. LIC’s market share in new business premiums remains at 64 percent despite the presence of 23 private insurance companies. In the last two years, however,  there has been a decline in the market share of the new business premium.

The government is eager to launch the LIC initial public offering (IPO) before May 12, 2022. “On May 12, the three-month timetable after filing the Draft Red Herring Prospectus (DRHP) comes to an end,” said Zee Business special correspondent. Keeping this in mind, Shah remarked that the government intends to introduce the RHP before it.
Individual single premiums have also risen by 61% to Rs.4,018 crore in March 2022, compared to Rs.2,495 crore the previous fiscal. In March 2022, the Group Single-Premium climbed by 48% to Rs.30,052 crore, up from Rs.20,294 crore in March 2021.

In the financial year 2021-22, the number of policies sold by LIC increased by 3.54 percent to 2 crore 17 lakh, up from 2 crore 10 lakh the previous year. For the month of March 2022, LIC sold 48 lakh 96 thousand insurance, compared to 46 lakh 67 thousand for the month of March 2021.

By the end of the fiscal year 2022, the government expected to conduct the LIC IPO. The timeline was thrown off by the conflict between Russia and Ukraine, as well as the financial market’s volatility. “Ideally, I’d like to go forward with it because we’d planned it for some time based only on Indian concerns,” finance minister Nirmala Sitharaman said on March 1. However, if global considerations need it, I wouldn’t mind looking at it again. “When a private sector promoter makes this decision, he just has to explain it to the company’s board of directors. But I’d have to explain it to everyone in the world “she added afterwards. The government is now expected to launch the LIC IPO between April 25 and 29, according to sources.

According to the current DRHP, the government will sell 31.6 lakh shares to dilute a 5% holding in the insurance colossus for Rs.63,000 crore. When LIC gets listed, its market value will be comparable to that of leading firms such as RIL and TCS. The sum raised by Paytm’s IPO in 2021 was the greatest ever, at Rs.18,300 crore, followed by Coal India (2010), which raised roughly Rs.15,500 crore, and Reliance Power (2008), which raised Rs.11,700 crore. The following are the major developments that investors should be aware of.