LIC IPO Date, Details, Update, Valuation and Live News 2020

LIC is planning to bring an IPO to sell 10% of its stake and get listed at BSE and NSE stock exchanges. This fast track IPO is part of the disinvestment of government stake in LIC. The government of India is planning to raise funds between Rs 80,000 to 1 lakh crore through this IPO.

The LIC IPO 2020 offers a great opportunity to retail investors and employees to invest in the company for the long term as well as making quick listing day gains. It is also speculated the LIC Policy Holders may get a reserved quota in this IPO.

In the Union Budget speech for 2020-21, Finance Minister Nirmala Sitharaman had said:

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 has not filed the DRHP as of Aug 2020. All information on this page is based on the LIC IPO news available in the public domain and information gathered by our journalists through their sources. We will keep posting you with the latest updates on LIC IPO on this page.

LIC IPO Details

LIC IPO Information

Issue Open Date	Expected in FY 2020-21
Issue Close Date	Expected in FY 2020-21
Issue Type	Book Building Offer
Price Band	Rs [.]to Rs [.] per share Employee Discount: [.]
Minimum Lot Size	[.]
Face Value	[.]each
Issue Size	Rs 80,000 to Rs 1,00,000 crore* [Tentative]
Book Running Lead Managers	-
Registrar	-
Book Building Proportion	Employee Reservation : [.] shares QIB (50%) : [.] shares NII (15%) : [.] shares Retail (35%) : [.] shares

LIC IPO Date

LIC IPO is one of the most eagerly awaited IPO of the decade and all are keen to know of its launch date. As per the budget announcement, the IPO is likely to be launched in the second half of FY 2020-21.

The process that was slowed down due to the pandemic has now kick-started in full swing. The government has finalized Deloitte as the pre-initial public offer (IPO) transaction advisors. There is still a lot of work to be completed in the pre-IPO phase and we will have to wait for the dates to be announced.

LIC IPO Size

The government is expected to sell not more than 10% of its stake in LIC. The rough estimates of valuation done by analysts vary between Rs 8 lakh crores to Rs 11 lakh crores. Considering the government sells 10% of its stake, the IPO size can be expected to range between Rs 80,000 to 1 lakh crore. Though this is based on estimates we may have to wait for actual valuations to be done which is going to be a mammoth task.

LIC IPO Price

The price band for IPO can be determined based on the actual valuation and the existing share price of the competitors in the insurance industry. The issue price is usually announced one week before the issue opens for the public for subscription.

LIC IPO Valuation

Various analysts have provided rough estimates on the valuation of LIC to be between Rs.8 lakhs to 11 lakhs crores. However, the government will need to arrive at the actual value of LIC before filing DRHP.

The process to determine the actual valuation of LIC is going to be a tough task considering the giant size of the company. It will need a team of professionals with sound knowledge of the insurance industry.

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LIC IPO Advantages and Disadvantages

Amidst all the mixed opinions whether the decision to disinvest LIC is good or bad, LIC IPO has below benefits to offer:

• It will enhance transparency and governance in LIC's operations.
• It will help attract foreign capital to the insurance industry.
• Retail investors and employees can be part of the wealth created by the insurer by participating in its equity.
• With government selling not more than a 10% stake in LIC, the government will still be the major stakeholder and there will be no change in its ownership. The IPO is not intending to have any impact on the policyholders and employees.

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LIC IPO Updates

Date	Event
Feb 01, 2020	Govt proposed LIC IPO in Union Budget for 2020-2021.
Jul 29, 2020	Deloitte is selected for pre-IPO transaction advisors.

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About LIC

Life Insurance Company of India (LIC) is the oldest and largest 100% Government of India owned insurance company formed by the LIC Act 1956. LIC has been treasuring the trust of Indians for the last 63 years and strives to meet its slogan of "Your welfare is our responsibility" in every possible way. Started with an initial capital contribution of Rs 5 crores from the government, today the asset-value of LIC has reached over Rs 31 lakh crore.

LIC Key Facts

• LIC has its presence all over India with its corporate office headquartered in Mumbai. As of 31st March 2020, LIC has 8 zonal offices, 113 divisional offices, 2,048 branch offices, and 12 lakhs+ agents. LIC also has international presence through its branches/joint venture companies/wholly-owned subsidiary and is present in 14 countries including places like Singapore, Kenya, Sri Lanka, Nepal, Bangladesh, Fiji, Kuwait, Mauritius, Oman, Qatar, UAE, UK, and Bahrain.
• The product mix of LIC includes conventional insurance plans along with unit plans, special plans, pension plans, micro insurance plans, and health plans. As of 31st March 2019, LIC has approximately 290 million policyholders.
• LIC's staff strength is of 111,979 employees as of 31st March 2019.
• LIC is a profitable public sector undertaking. As of 31st March 2019, LIC has a net premium income of Rs 337,000 crores (an increase of 6.08% compared to the previous year) and profit after tax of Rs 2,688 crores. The profit from its equity investment stands around Rs.23,000 crore.
• LIC holds a giant's share in the insurance industry with 66.24% market share in terms of total first-year premium (premium collected from new business in a financial year excluding single premium) and 74.71% in terms of the number of policies.
• The Gross NPA of LIC has been on the rise and is at 6.15% as of 31st March 2019. However, considering the huge asset size, there is not much to worry as LIC has made considerable provisions for the bad loans.
• Key Ratios of LIC as of 31st March 2019:
• The solvency ratio of LIC stands at 160% which is little above the required solvency ratio of 150% as stipulated by the Insurance Regulatory and Development Authority (IRDAI).
• The LIC persistency ratio indicating a pool of satisfied customers in terms of the number of policies and terms of annualized premium ranges between 50-60% and 60-77% respectively.
• The claim settlement ratio of LIC is the highest of all insurers and stands at 98%