LIC IPO Details and Analysis | Life Insurance Corporation of India- Initial Public Offering

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LIC India
LIC India

Get Ready to learn about the Biggest IPO in India's History till now.

Introduction:

Life Insurance Corporation of India is a subsidiary of the Government of India. As the government is heading towards the disinvestment target of 2.1 Trillion Rupees, now it has considered LIC to be the one to roll out an IPO of around 5-10% of its overall market capitalization.

LIC is the Oldest Corporation to provide insurance in India and has the biggest experience to survive the Market Crashes. It is a consolidation of 245 private life insurers. And the origin of LIC was started from 1884 and finally in 1956 the company was Nationalized.

Market Capitalization:

If we take a look towards the market capitalization of Life Insurance Corporation of India, we can find out that if the government wants to sell around 5-10% of the stake, then the Cost of the IPO will be👇👇

Stake Sell

Market Cap in Cr.

5%

50,000 Cr. - 1,50,000 Cr.

10%

1,00,000 Cr - 3,00,000 Cr.

The valuation of LIC is around 10 Lakh Crores to 30 Lakh Crores. Therefore it is difficult to find out the exact value of IPO, but even if take the least valuation the LIC IPO is the biggest in history.
This huge difference is the valuation is due to the different types of methods to find valuation.
The valuation according to profits is around 30 Lakh Crores. So in this blog, we will discuss the valuation regarding the yearly profits.

Company Business:

LIC operates in the insurance business and in almost every type of insurance. It has the 2nd Highest Claim passing rate at 97.7% after HDFC Life at 98.9%.
But the claims passed by LIC are more than 1.3 Lakh and the claims passed by HDFC Life are around 30 Thousand which is nowhere in front of LIC. 
So currently LIC is the biggest in the insurance business than any other company. And it is expected that till another 10-15 years it will be on the top of Business.

LIC IPO
LIC IPO

The company has a market share of 70%😮😮 in the insurance business on its own, and the remaining 30% market share is divided by every insurance company remaining.

It has the biggest network of Insurance agents in India and is recruiting agents at a very high rate, which will help it in growing fastly. The corporation gives payment to the agents on every individual referred by them and also offers recurring benefits to them on every premium paid by their client. This helps the company manage its cash-flow because when the company receives the payment then it pays a certain fixed amount from the premium to the agent, and the company, therefore, doesn't have to pay any additional monthly income to the agents. So by this incentive method, the agent has to refer clients to LIC if he has to be paid.

IPO Analysis and peer comparison in IPO:

This is the most awaited IPO by the Stock Market and has already driven a positive talk among investors and the Stock Market Broker Industry. The hype is very high for the IPO which makes it safe to consider for applying.
This IPO is expected to be in the market around Sep-Oct as we know that the IRCTC IPO came with the same hype and also in the month of Oct, so it is also expected that it will launch around the same time. As many analysts are saying that the whole LIC IPO process will take around 1 year to successfully launch it.
It is said that the IPO will come in installments. for eg. If the company has an IPO value of 3 Lakh Crores, then it will come in 10 installments of 30,000 Crores each which will make it easier to handle.

As the IRCTC IPO was launched at an issue price of 315-320 Rs with a lot size of 40 shares and the cost of 1 Lot was around 12,800 Rs. and this IPO gave a listing gain of more than 300 Rs and listed at a price of more than 650 Rs on the first day. This made the investment of the subscribes around 2X and after a short span of 4 months the share got priced at 2100 Rs. which made the investment of Rs. 12,800 to Rs.84,000 which was a huge success for the IPO and as the LIC is exceptionally bigger than IRCTC, it is expected that LIC will be even more successful than the IRCTC IPO. 

Let's just everybody hope for the same, and the point of making this blog was to encourage retail and small investors to enter the capital market with the right share for a long-term investment mindset. Thank you.

Want to buy an IPO?

Location: India

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