To be announced
The LIC IPO, likely to open in the last quarter of FY 2021-22, is the government’s plan to reduce its holding in the insurance company. The LIC IPO is expected to be the biggest issue in the country as the government expects to raise around Rs 80000-90000 crore from its stake sale. The government is also evaluating the possibility to allow foreign institutional investors to buy up to 20% in the IPO.
LIC is a statutory insurance and investment corporation that comes under the ownership of the Ministry of Finance, Government of India. Founded in 1956 by merging nearly 245 insurance companies, LIC is the only insurance company that possesses a strong presence in rural as well as urban areas. As of now, LIC has around 2048 branches in India and there are 8 zonal offices. Apart from zonal branches, there are 112 divisional offices, 1526 satellite offices, and 1,178 mini offices in India. According to IRDAI (Insurance Regulatory and Development Authority of India), LIC collected a massive premium of Rs 1.84 lakh crore in FY21.
According to LIC’s 2019-20 annual report, LIC commands a market share of around 69% in the life insurance space with assets under management (AUM) of Rs 15 lakh crore. It has a robust financial performance and is debt free as of FY21. LIC has a diverse product portfolio to suit the likes of different customers. LIC’s reach and network of 16 lakh agents across the country is incomparable to any of its peers. A significant amount of trust is built into the LIC brand.
Although it has a wide reach, it faces stiff competition from other private players that offer better service to policyholders. Given the fact that it is a PSU, there are certain restrictions for LIC. LIC is known for its risk-free return because of its diversified investment which can be an impediment for the growth of the company. LIC offers lower return due to its low exposure to equities
You can apply for the LIC IPO in these ways:
Link your personal bank A/C to a trusted UPI ID and map it with your TradeSmart account. Now, proceed further to book your IPO. On acceptance of the mandate, the bid amount will get blocked in your bank account Learn more.
How much does the government plan to raise from the LIC IPO?
The government looks to raise as much as Rs. 1.75 lakh crore through disinvestment in the current monetary year through the LIC IPO
Has LIC announced the IPO date yet?
No, the LIC IPO is slated to hit the markets in the third or fourth quarter of FY 2021-22. The pre-IPO process is already underway.
What is the lot size and the minimum order quantity for the LIC IPO?
The details on the IPO are yet to be announced.
Who is the registrar for the LIC IPO?
The details on the registrar are not yet announced.
How will the LIC IPO affect existing policyholders?
Existing LIC policyholders will not be directly impacted by the upcoming IPO. However, once LIC is listed, its processes will become transparent.
Will LIC policies retain their sovereign guarantee?
LIC policies would not lose their sovereign guarantee. Finance Minister Nirmala Sitharaman has assured that the interests of 30 crore policyholders would be protected when the government dilutes its stake in the company.
Which categories of investors are allowed to participate in this IPO?
Retail individuals, NIIs and QIBs are the expected categories that can participate in this IPO.
How will LIC IPO impact the employees?
The LIC IPO is expected to offer a special reservation for its employees. The government has decided to allocate a 10% of the issue size for LIC policyholders. Also, they are likely to receive a discount on the floor price.
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