Country's largest insurer LIC to announce India's Mega IPO soon; stay updated here

Country's largest insurer LIC is coming up with mega IPO, expected anywhere between Q4 of financial year 2021-22 and Q1 of financial year 2022-23.

Insurance behemoth Life Insurance Corporation of India (LIC) is planning to float its maiden public issue and soon would be listed on Indian stock exchanges. As a part of government's divestment plan, government would dilute around 10 percent of equity in upcoming LIC's IPO. As per media reports IPO fund raising will be highest in the history of public issues.

India's largest insurer LIC, command 72%/61% market share in Number of policies/First year premium collection in life insurance industry as on 31-Dec-2021

Union Finance Minister Ms. Nirmala Sitharaman during her finance budget 2020-21 indicates public float of LIC and said that, listing of companies on stock exchanges disciplines the company and provides access to financial markets and unlocks its value. It also gives an opportunity for retail investors to participate in the wealth so created. The government now proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO). 

LIC is known for its loyal customers and most trusted LIC brand that will bring cheers to the IPO

Given the large scale IPO, LIC's IPO would meet Government's divestment targets in addition to investment opportunity for retail investors and employees. It will also bring cheers to the LIC policyholders, as special provisions are being made that may bring Policyholders eligible to apply for the IPO. This will attract people at large and people who are loyal towards LIC can become stakeholders.

Strong base of 1.35 million LIC agents spread across PAN India and to the grassroot level would attract larger investors for the IPO

LIC Policyholders Reservation:

As per the preliminary study, LIC is exploring options to update and link PAN number with the existing LIC policy that may be used as a identifier to be eligible for the reservation under policyholders quota. Below are few FAQ to understand more about about eligibility:

Q. How to apply under Policyholders category ?

A. Only Eligible Policyholders will be able to apply for the said IPO.

Q. Who are Eligible Policyholders ?

A. As per prelim study, Policyholders who have linked their PAN number with active LIC policy and who have valid demat account where PAN number is same are termed as eligible Policyholders.  More details on eligibility conditions will be updated as an when available.

Q. I have not linked PAN with existing LIC policy, how to do it ?

Policyholders can update PAN number by contacting their LIC Agent or online at LIC website.

Q. I have linked PAN with LIC policy but don't have demat account.  How to open demat account ?

A. You can open demat account with any Bank or share broker/sub-broker registered with SEBI.

 

Event Timeline of LIC IPO: Below is the timeline for LIC IPO events to track updates of the IPO
Q4FY22 to Q1FY23
IPO expected in last quarter of financial year 2021-22.
8-Mar-2022
LIC received final observations from SEBI on its Draft Red Hearing Prospectus (DRHP). This means a go ahead of IPO.
13-Feb-2022
LIC filed its Draft Red Hearing Prospectus (DRHP) with SEBI
February 2022
LIC Tied up with Policybazaar.com for distribution of its products online. Source: Business Standard
December 2021
LIC started pushing its policyholders to update Contact details and PAN card in their existing active policies and open Demat account. Source: LIC Advertisement
September 2021
Appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial public offering of country's largest insurer LIC. Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd.
July 2021
Request for proposal (RFP) for Legal Adviser, Advertising agency, Book Running Lead Managers and Registrar for LIC IPO
February 2021
Government of India announced proposes to sell a part of its holding in LIC by way of Initial Public Offer (IPO).
1956
LIC of India Established. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956.

About Life Insurance Corporation of India (LIC)

Established on 1st September 1956, Life Insurance Corporation of India (LIC) with key objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC is currently (Pre-IPO) owned wholly (100%) by Government of India Quick Pointers LIC offers Individual Assurance, General Annuities, Pension, Non-Linked Health plans, Unit linked plans and Group Insurance business. Today LIC has 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satallite offices, 1173 mini offices and the Corporate office at Mumbai. During FY21, LIC issued 20.97 million policies and collected Rs 564.05 billion towards first year premium. LIC has 1.35 million agents in FY21 v/s 1.2 million in FY20. Settled 89.8% maturity claims in FY21 (87.7% in FY20) amounting to Rs 1,610.3 billion. Settled 98.3% death claims in FY21 (95.4% in FY20) amounting to Rs 241.95 billion. 100% claim settlement is through NEFT valuing Rs 1367.96 billion in FY21.