LIC IPO: This could be the issue price
The stage for the country’s biggest IPO is starting to get ready. Life Insurance Corporation of India (LIC) has started a roadshow with global investors. Also, it is expected that the price of its share in the issue can be fixed near around Rs 2,000.
Draft submitted to SEBI
LIC has submitted the draft for the issue with SEBI on Sunday. The company can raise 60-65 thousand crores through this. It will sell 31.5 crore shares which will be 5% stake in the company. On this basis, the issue price may be around Rs 2,000. It has a total of 632 crore shares. If retail investors get 5% discount then they can get this share for around Rs 1,900.
Meeting with Global Investors
According to the information, LIC has held meetings with global investors such as HSBC, Capital Group, University of California, Abu Dhabi Investment Authority (ADIA) and Singapore GAC. Along with this, Canadian Pension Fund, Standard Life and HSBC Mutual Fund are also included in this.
Roadshow later for domestic investors
However, the roadshow for domestic investors will be started later. The company first seeks an assurance from the foreign investors that they should participate in the issue in large numbers. Since this is the biggest and government issue, LIC does not want any default in it at any cost. It wants to make sure in advance that it gets 100% subscription.
6.2 lakh crore premium
According to the draft submitted with SEBI, the Indian life insurance industry had received a total premium of Rs 6.2 lakh crore in 2021. It was Rs 5.7 lakh crore a year ago. Broking house Angel One has said in its report that the market cap of LIC will be Rs 13 to 15 lakh crores. That is, it will be the largest company after the country’s most valuable Reliance Industries.
Reliance 16 lakh crore company
The market cap of Reliance is close to Rs 16 lakh crore. At present, the government has 100% stake in LIC. Its assets are beyond Rs 44 lakh crore. It has 29 crore policies and life funds of Rs 34.3 lakh crore. It has 2,048 branch offices, 8 zonal offices, 113 departmental offices and 11.48 lakh agents.
Agent in constant touch with policyholders
For the last 2 months, LIC agents are continuously asking their policyholders to open demat accounts. LIC itself has also said that if you want to be a part of this IPO then you have to open a demat account. LIC has a share of about 3.67% in the Indian stock market. The total value of this part is Rs 9.53 lakh crore.
More than 1% stake in 278 stocks
There are 278 stocks of NSE in which it has more than one percent stake. It alone holds 77% of the investments of insurance companies in the stock market. In percentage terms, it holds the highest stake at 49.24% in IDBI Bank, while it owns 45.24% in LIC Housing Finance. The bankers of LIC are Kotak Mahindra, Axis Capital, Bank of America, Citigroup, JP Morgan, JM Financial and others.
