LIC IPO Date, Price, GMP, Review, Analysis & Details

The Life Insurance Corporation of India (LIC) IPO is likely to be the biggest initial public offering in the Indian stock market. Meanwhile, The government has reserved 10% which is around 3.16 crores of shares of LIC through IPO. Click here to Apply for LIC IPO.

LIC is the largest insurance provider company in India. It has a market share of above 66.2% in new business premium. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.

As of 30 Sep 2021, it has a total AUM of Rs. 39 lakh crore. LIC operates through 2048 branches, 113 divisional offices, and 1,554 Satellite Offices. It operates globally in Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom.

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 bringing 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 the varied insurance needs of individuals.
LIC IPO
LIC IPO

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 Financials:

ParticularsFor the year/period ended (₹ in Millions)
 31-Dec-2131-Mar-2131-Mar-2031-Mar-19
Total Assets40,907,867.7837,464,044.6834,141,745.7433,663,346.17
Profit After Tax17,153.1229,741.3927,104.7826,273.78

Objects of the Issue:

The IPO aims to utilize the net proceeds for the following purposes;

  1. To achieve the benefits of listing the equity shares on the stock exchange.
  2. To carry out an offer for sale of 221,374,920 shares by selling shareholders.

LIC IPO Details

LIC IPO DateMay 4, 2022, to May 9, 2022
LIC IPO Face ValueRs 10 per share
LIC IPO PriceRS 902 to Rs 949 per share
LIC IPO Lot Size15 Shares
Issue Size221,374,920 shares of ₹10
(aggregating up to ₹21,008.48 Cr)
Offer for Sale221,374,920 shares of ₹10
(aggregating up to ₹21,008.48 Cr)
Retail DiscountRs 45 per share
Employee DiscountRs 45 per share
Issue TypeBook Built Issue IPO
Listing AtBSE, NSE
QIB Shares OfferedNot more than 50% of the Net Offer
Retail Shares OfferedNot less than 35% of the Net Offer
NII (HNI) Shares OfferedNot less than 15% of the Net Offer
Company PromotersThe President of India, acting through the Ministry of Finance, Government of India is the company promoter.

LIC IPO Timeline (Tentative Timetable)

LIC IPO opens on May 4, 2022, and closes on May 9, 2022. The LIC IPO bid date is from May 4, 2022 10.00 A.M. to May 9, 2022 5.00 P.M. The Cut-off time for UPI Mandate confirmation is 12 P.M. on the next day of issue closing day.

EventDate
LIC IPO Opening DateMay 4, 2022
LIC IPO Closing DateMay 9, 2022
Basis of AllotmentMay 12, 2022
Initiation of RefundsMay 13, 2022
Credit of Shares to DematMay 16, 2022
LIC IPO Listing DateMay 17, 2022

LIC IPO Lot Size

The LIC IPO lot size is 15 shares. A retail-individual investor can apply for up to 14 lots (210 shares or Rs 199,290).

ApplicationLotsSharesAmount
Minimum115Rs 14,235
Maximum14210Rs 199,290

LIC IPO Promoter Holding

Pre Issue Share Holding100%
Post Issue Share Holding96.50%

LIC IPO Details by Investor Category

CategoryBidding atMax Bid AmountBasis of AllotmentDiscountFinal Price
HNIAt priceRs 9,067 CrProportionateNoRs 949
RetailCut-offNot above Rs 2 lakhsDraw of LotRs 45 per shareRs 904
EmployeeCut-offNot above Rs 2 lakhsProportionateRs 45 per shareRs 904
Policy HoldersCut-offNot above Rs 2 lakhsProportionateRs 60 per shareRs 889

LIC IPO Reserved Category (Policyholder, Employee, and Retail)

LIC IPO Multiple Applications

A LIC policyholder can apply for LIC IPO shares using 2 IPO applications in the following categories:

  1. Policyholder + Retail Category
  2. Policyholder + HNI (NII) Category

LIC IPO Limits in Reserved Quotas

  • Rs 2 lakh investment limit in policyholders, employees, and retail investors’ quotas.
  • Policyholders can Increase limits by bidding in the “policyholders + retail” quota (Rs 2 + 2 lakh).
  • Employees can Increase limits by bidding in the “employee + policyholders + retail” quota (Rs 2+2+2 lakh).

Advantages of Reserved Quota in LIC IPO

  • Policyholders get Rs 60 per share discount on the final offer price.
  • Rs 45 per share discount in retail and employees’ quota.

Eligible Policyholders for Reserved Policyholders Quota in LIC IPO

  • The policy should be bought on or before February 13, 2022.
  • The annuity policyholder is eligible, but not the beneficiary.
  • the Last date for updating PAN details in your policy was February 28, 2022.

LIC IPO Review

Ever since LIC announced its IPO plans, it became the talk of the town and more so after filing its DRHP in February 2022. Investors across the board were busy calculating its valuations considering its mammoth size of business and market share amidst competition. Now that it has filed RHP and its issue details are announced, its pricing mirroring embedded value and business growth trajectory appears reasonable. With its investor-friendly move with a discount to its pillars i.e. policyholders as well as retail investors, the issue has now turned more attractive. The government of India has again shown its investor-friendly gestures with such moves amidst troubling times like the Russia-Ukraine war, spiraling inflation, and weak global markets. Investors may consider investing in this mega insurer’s maiden mini offer for medium to long term rewards.

How to apply for LIC IPO?

Here is your quick checklist for LIC IPO:

UPI

  • Link your bank account to a UPI ID.
  • Register your UPI id with your Demat account.
  • Subscribe for LIC IPO and approve the payment on your UPI ID.

Demat Account

For HNI Investors
You can also apply for LIC IPO under the HNI category where your investment should be between 2 Lakhs to 5 Lakhs. Additionally, 15% of IPO shares are reserved for HNIs.

LIC IPO – Noteworthy Highlights

LIC is the only government-owned insurance company in the country. The entity was formed by merging around 245 insurance companies. Other highlights include :

• Besides life insurance, the company also extends mutual funds, pension funds, housing finance, and card services.

• As of 31 March 2021, there were around 13.53 lakhs individual LIC agents.

• It has more than 1.14 lakh employees. LIC employees are also offered a discount of Rs.45/- per share.

LIC IPO FAQs

What is LIC IPO?

The government is diluting its stake in LIC through this upcoming IPO. It is an invitation for the public to participate in its ownership. Post listing, the company will come under the regulations of SEBI.

When will LIC IPO open for subscription?

LIC’s IPO will open for subscription from 4 May to 9 May.

What is the minimum lot size that retail investors can subscribe?

The Minimum LIC IPO market lot size is 15 shares

Can I apply for this LIC IPO without a UPI ID?

Yes, you can apply for this LIC IPO without a UPI ID. However, in such cases, you can take the assistance of the ASBA process provided by a bank to apply for an initial public offering. Also, if you do not have a UPI ID, you can swiftly generate one without any hassle by referring to any of the UPI handles approved and mentioned on the NPCI list.

What is LIC IPO expected price?

The LIC IPO price is Rs 902 to Rs 949 per equity share. A discount of Rs 45 is offered to Retail Investors and Rs 60 to LIC Policyholders.
The effective price for LIC IPO shares at the upper price band will be Rs 949 for QIB and NII, Rs 904 for retail, and Rs 889 for Policyholders.

Malik Mehrose
Malik Mehrose is a young entrepreneur, author, blogger, and self-taught developer from Jammu and Kashmir. He is the founder and CEO of SHOPYLL, His startup "SHOPYLL" has emerged a new shine to e-commerce business in Jammu and Kashmir, with a vision to boost the e-commerce ecosystem and to uplift industrialization in Jammu and Kashmir.