Mumbai, May 04, 2022: Life Insurance Corporation of India’s initial public offering, the country’s biggest ever opened for subscription on Wednesday, May 4, 2022. The issue saw a robust response from its Policy Holders, its Employees and the Retail Investors. GoI, acting through the Ministry of Finance is looking to raise as much as Rs 21k cr by dilution 3.5% of its holding.

The offer received bids for 10,86,45,360 shares against the offered 16,20,78,067 equity shares (excluding shares offered to anchor investors), as per the 7:00 pm data available on the bourses. The IPO is through an offer-for-sale (“OFS”) of up to 221,374,920 Equity Shares of Face Value of Rs 10 each.

The reserved portion for eligible policy holders was subscribed 1.99 times, the portion reserved for eligible employees was subscribed 1.17 times. Retail investors bid 0.60 times the shares reserved for them, while the part set aside for non-institutional investors was subscribed 0.27 times. Qualified institutional buyers portion saw subscription of 0.33 times. Overall the issue was subscribed 0.67 times.

On Monday, LIC raised Rs 5,627 crore from anchor investors, who were allotted 5,92,96,853 equity shares at the upper price band of Rs 949 per share.

Majority of the Brokerage Houses such as Angel Broking, Asit C Mehta, Ashika Research, BP Equities, GEPL Capital, Hem Securities, IIFL Securities, Motilal Oswal, Nirmal Bang, LKP Securities, Ventura Securities  have given recommendations of “Subscribe” rating to the issue.

According to brokerages, given the corporation’s dominant position, increasing focus on non-par product launches, bettering its VNB Margins, LIC is well-positioned to capture India’s underpenetrated life insurance market. It is valued at 1.1x 1HFY22 EV, which is significantly lower than the value of its private listed peers. The company, which is India’s largest asset manager and has a proven track record of financial performance and profitable growth, appears to be a good investment opportunity.

India’s largest life insurer, LIC 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

Kotak Mahindra Capital Company Limited, Axis Capital Limited, BofA Securities India Limited, Citigroup Global Markets India Private Limited, JM Financial Limited, J.P. Morgan India Private Limited, Goldman Sachs (India) Securities Private Limited, ICICI Securities Limited, Nomura Financial Advisory and Securities (India) Private Limited and SBI Capital Markets Limited are the book running lead managers to the issue.

Company Information

LIC was formed by merging and nationalizing 245 private life insurance companies in India on September 1, 1956, with an initial capital of ₹50.00 million. LIC is the fifth largest life insurer globally by GWP (comparing LIC’s life insurance premium for Fiscal 2021 to its global peers’ life insurance premium for 2020) (source: the CRISIL Report) and the largest asset manager in the country as at December 31, 2021 (source: the CRISIL Report), with an established track record of financial performance and profitable growth. As at 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. LIC’s omni-channel distribution platform for individual products currently comprises (i) individual agents, (ii) bancassurance partners, (iii) alternate channels (corporate agents, brokers and insurance marketing firms), (iv) digital sales (through a portal on our Corporation’s website), (v) Micro Insurance agents and (vi) Point of Sales Persons – Life Insurance.

LIFE INSURANCE CORPORATION OF INDIA Last updated on 04 May 2022 | 07:00:00 PM Sr.No. Category No.of shares offered / reserved No. of shares bid for No. of times of total meant for the category 1 Qualified Institutional Buyers (QIBs) 3,95,31,236 1,32,05,955 0.33 1(a) Foreign Institutional Investors (FIIs) – 225 – 1(b) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) – 63,22,425 – 1(c) Mutual Funds – 15,54,090 – 1(D) Others – 53,29,215 – 2 Non Institutional Investors 2,96,48,427 79,75,875 0.27 2(a) Corporates – 34,54,425 – 2(b) Individuals (Other than RIIs) – 44,58,360 – 2(c) Others – 63,090 – 3 Retail Individual Investors (RIIs) 6,91,79,663 4,16,25,285 0.60 3(a) Cut Off – 3,55,58,595 – 3(b) Price Bids – 60,66,690 – 4 Employee Reserved 15,81,249 18,53,430 1.17 4(a) Employee (Cut off) – 12,98,775 – 4(b) Employee (Price) – 5,54,655 – 5 Policyholder Reserved 2,21,37,492 4,40,31,225 1.99 5(a) Policyholder (Cut off) – 3,74,28,285 – 5(b) Policyholder (Price) – 66,02,940 – Total 16,20,78,067 10,86,91,770 0.67