India’s largest IPO to raise Rs 21,000 cr by LIC open for subscriptions from May 4 to 9
MUMBAI, May 1 (The CONNECT) – Life Insurance Corporation (LIC) of India, the Rs 40 lakh crore-strong fund house and one of the large investors, is finally going public this week with the government biting the bullet amid market volatility and geo-political uncertainties.
The country’s largest issue targeting to raise Rs 21,000 crores opens for anchor investors tomorrow and LIC claims that it has received strong queries from at least 25 institutional investors who are expected to chip in over Rs 5,000 crore.
The issue is right sized, well timed with the perfect valuation, said Tuhina Kant Pandey, Secretary in the Department of Investment and Public Asset Management (DIPAM).
The government has fixed the price band at ₹ 902 to ₹ 949 per Equity Share for the IPO that is aimed at divesting 3.5% stake at an enterprise value of Rs 6 lakh crores, LIC Chairman M R Kumar said.
The issue, described by an analyst as a one-in-a-life-time opportunity for investors, is open between on May 4 and 9 and one can bid for a minimum of 15 Equity Shares and in multiples of 15 Equity Shares thereafter.
The government has already informed market regulator SEBI that LIC does not intend to go for further dilution over the next 12 months, Pandey said.
The IPO is through an offer-for-sale (OFS) of up to 221,374,920 Equity Shares by the President of India, acting through the Ministry of Finance. The Offer includes a reservation for Eligible Employees and Eligible Policyholders.
LIC, India's largest life insurer, had a market share of 61.6% in terms of premiums or GWP, 61.4% in terms of New Business Premium (or NBP), 71.8% in terms of number of individual policies issued, and 88.8% in terms of number of group policies issued, for the nine months ended December 31, 2021 as per CRISIL Report.
LIC was formed by merging and nationalizing 245 private life insurance companies in India on September 1, 1956, with an initial capital of ₹5 crores. The company as emerged as LIC is the fifth largest life insurer globally by GWP – gross written premiums - and the largest asset manager in the country with an established track record of financial performance and profitable growth. As on December 31, 2021, the Corporation covered 91% of all districts in India and had the largest individual agency network among life insurance entities in India, comprising approximately 1.33 million individual agents.
LIC’s individual product portfolio in India comprises 32 individual products (16 participating products and 16 non-participating products) and seven individual optional rider benefits. LIC’s group product portfolio in India comprises 11 group products. Customers in the age bracket 27 to 40 years old accounted for approximately 42% and 42% of individual policies sold in Fiscal 2021 and the nine months ended December 31, 2021, respectively.