LIC IPO: Most of the investors are waiting for the country’s biggest IPO. Especially retail investors are eagerly waiting for the IPO of the country’s largest insurance company ie LIC. This IPO is going to hit the market soon. The company has submitted the Application for Issue (DRHP) with SEBI. There is a possibility that this IPO may come in March.
In this IPO, 10 percent stake will be reserved for LIC policy holders. Also, they can get shares at some cheap price. Because of this, there is even more hype about this IPO. However, at this time there is weakness in the Indian stock market.
According to this document, the embedded value of the company is Rs 5.39 lakh crore. Currently listed private insurance companies are trading at 3-4 times their embedded value. With the issue size of LIC and its strong hold of 66% in the market, despite having new business premium, its growth is not like that of private insurance companies.
Also read- LIC IPO: How much and how will LIC policy holders get benefit in IPO, know what to do
IPO between Rs 53,500 crore and Rs 93,625 crore
If we multiply the embedded value of LIC by 2-3.5 times, then it ranges from Rs 10.7 lakh crore to Rs 18.7 lakh crore. Based on the total equity capital of 632 crore shares, if we look at the 5% issue, then the IPO of LIC can be between Rs 53,500 crore and Rs 93,625 crore. Accordingly, the issue price of LIC can be between Rs 1963-2961. In comparison, the share acquisition cost for the government is Rs 0.16 per share. There was capital restructuring in LIC before bringing the issue.
When LIC was started, its initial capital was Rs 100 crore. LIC was the premium collecting company then, so its shares were never allotted to anyone else. Before bringing the issue, the government had invested an initial Rs 100 crore to convert LIC from corporation to corporate and Rs 10 face value shares were allotted to the government.
It is necessary to link PAN
If policyholders want to apply for IPO, then according to LIC’s website, they will first have to update their PAN on LIC’s site. LIC has said in a public notice, “To participate in the IPO, policyholders have to ensure that their PAN is correct in the records of the company. Also, it is important to mention that to participate in any IPO in India, it is mandatory for the investor to have a demat account.
Tags: IPO, LIC IPO, Life Insurance Corporation of India (LIC), Share market, IPO
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