LIC IPO expected soon, here's all you need to know
Government is looking to dilute 5% of its stake in the LIC
LIC has an embedded value of around Rs 5 lakh crore
It may reserve a 10% quota for policyholders
Life Insurance Corporation of India may file the draft red herring prospectus (DRHP) for its IPO soon. The insurance regulator IRDAI gave its approval for LIC’s IPO proposal on February 9.
Today’s LIC board meeting has already concluded but the much-awaited LIC IPO DRHP may be filed next week. According to reports, the company may reserve a 10% quota for policyholders.
Total number of shares: The central government is looking to dilute 5% of its stake in the country’s largest insurer. The government might sell 316 million shares of the 6.32 billion shares it owns in the company. The company has an embedded value of around Rs 5 lakh crore.
According to the current plans, the government would keep the majority stake in LIC as the holding cannot go below 51% by law.
Products and services: LIC offers life insurance plans, endowment plans, whole life plans, pension plans, unit-linked saving plans, money back plans, term insurance plans and insurance riders.
Market share scenario
Gross written premium: 64.1%
New business premium: 66.2%
Number of individual policies: 74.6%
Group policies: 81.1%
Subsidiaries: LIC owns six subsidiary companies which include LIC Pension Fund, LIC Cards Services, LIC Housing Finance, LIC Mutual Fund Trustee Company, LIC Mutual Fund AMC and IDBI Bank.
Business Operations: In India LIC has 8 zonal offices in Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Kanpur, Bhopal and Patna. It has 113 divisional offices, 2,048 branch offices, 1,546 satellite offices, 1,173 mini offices, and 13.53 lakh individual agents. LIC has joint ventures with LIC Nepal, LIC Lanka, LIC Singapore, LIC Bangladesh, LIC BSC Bahrain, Kenindia Assurance and Saudi Indian Company.
Financial Report: In the first half of FY22, LIC reported a PAT of Rs 1,437 crore as compared with Rs 6.14 crore in the year-ago period. Its new business premium growth rate stood at 554.1% in H1 FY22, compared with 394.76% during the corresponding period of the preceding financial year.
In FY21, LIC reported a net premium income of Rs 4.02 lakh crore and the total revenue stood at R 6.82 lakh crore. Profit after tax (PAT) came in at Rs 2,900 crore.
Major Holdings: LIC holdings in value terms stood at Rs 9.53 lakh crore at the end of the third quarter, up 1.46% from the previous quarter. It owns 16% stake in ITC, 7.48% in M&M, 2.63% in HDFC Bank, 6.13% in Reliance and 5.67% in Infosys.