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LIC IPO: All you need to know

Blog | IPO

Along with being a LIC policyholder, you can now also become an investor in India’s largest life insurance company.  The state-owned insurance behemoth is all set to launch its IPO.   

Since its inception in 1956, Life Insurance Corporation of India (LIC) has donned many hats. From being a part of an individual's financial planning to bailing out distressed companies, it has been the go-to saviour for many Indians as well as the government. 

Most importantly, this behemoth has managed to hold on to its dominant position, despite the fierce competition from private players. 

Offer details

  • Start date: 4 May 2022
  • End date:  9 May 2022
  • Price band: ₹902-₹949
  • Minimum investment: ₹13,530
  • IPO size: ₹20,557 crore

Timeline

  • Allotment: 12 May 2022
  • Refund: 13 May 2022
  • Credit of equity shares: 16 May 2022
  • Listing: 17 May 2022

Note: The wait is worth it, stay tuned on this page for updated info

All about the IPO  

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Not only has LIC withstood the intense competition from bank-backed private players, but also continues to be a household name. It has a wide agent network, strong track record and brand salience. As of 31 December 2021, LIC was the largest insurer in India in terms of new business premium (NBP) with 61% market share. LIC is also the fifth largest insurer in the world in terms of gross premium in FY21. 

From term and health insurance to savings and unit linked insurance - it offers a variety of products to its 29 crore policyholders. In FY21, it sold more than 2 crore individual policies in India with a market share of 75% in this segment. 

Financials 

Net premium: 9.2%; Net profit: 6.4% (FY19-21 CAGR)

Strengths 

  • Omni-channel presence through agents (13 lakh+), bank partners, brokers and digital channel
  • Its NBP, i.e. the premium received from new policies in a year, grew at a CAGR of 13.5% between FY19-21 
  • Largest asset manager in India with ₹40 lakh crore in assets under management, as of December 2021
  • Low expense ratio of 8.7% in FY21 compared to the top five private players’ average of 11.9% 

Risks

  • Insurance claims by death increased during the pandemic and the risks persists for such events in the future
  • Faces significant competition from private players like HDFC Life and ICICI Pru Life, which are gaining market share
  • LIC’s market share has dropped from 66.4% in FY19 to 63.6% in first half of FY22
  • Lockdowns impacted distribution partners like agents’ ability to sell products
  • May need to infuse funds in IDBI Bank, in which it’s a majority stake holder

Good to know 

India’s fast growing insurance sector is highly underpenetrated. This provides huge potential for growth despite the rising competition. Between FY21-26, India’s new business premium is expected to grow at CAGR of 17%-18% to ₹6 lakh crore. Being a dominant player in the industry, LIC could benefit from this growth. 

FAQs

How can you pre-apply for LIC’s IPO? 

Pre-applying for LIC’s IPO means applying for this public issue before it goes live. Click here and follow these steps to pre-apply for the LIC IPO on Upstox.

When does pre-apply for LIC’s IPO open and how can you pay for it?

You can pre-apply for the LIC IPO from 29 April 2022. Once the IPO goes live, you will receive a UPI mandate. Accept this to block the IPO application amount and successfully place your bid.

How can you apply for LIC’s IPO? 

Click here to apply for the LIC IPO on Upstox. You can also download our app. Then click here and follow these steps.

If I am a policyholder, will I get preferential allotment in the IPO?

Yes, up to 10% of the LIC IPO issue size will be reserved for policyholders. It is also expected that allotment would be at a discounted rate.

Will there be different purchase options for policyholders, employees and investors during the LIC IPO?

In the "Investor type" section, you can choose to apply as an individual, policyholder or an employee. You can place a bid for each category based on the type of investor you are.

When does LIC’s IPO open and close for the subscription? 

The LIC IPO launch date is 4 May 2022. The LIC IPO will be open for subscription till 9 May 2022.

What’s the lot size and minimum investment needed for LIC’s IPO? 

The LIC IPO’s lot size is 15 shares and the minimum investment required is ₹14,235.

What is the price band for LIC’s IPO?

The LIC IPO’s price band is ₹902-₹949 per share. 

What’s the size of LIC’s IPO?

The size of the LIC IPO is ₹20,557 crore.

How many bids can I place for LIC’s IPO? 

You can place up to three bids for an application. 

Can these bids be placed at different times during the IPO subscription period?

No, the bids have to be placed at one go. If you want to add an additional bid, then you would have to delete your application and re-apply. 

When will LIC shares be credited to your demat account? 

If the shares are allotted, then they will be credited to your demat account on 16 May, 2022. Click here and follow the steps to check the allotment status.

Which exchanges will LIC list on?

Shares of LIC will list on BSE and NSE.

When will LIC list on the exchanges? 

LIC’s listing date is 10 May 2022.


For date, price and timeline details on the LIC IPO, click here. Also, for company information, news, updates and application process related to the LIC IPO, click here.

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