The Indian Life Insurance Fund was founded on September 1, 1956, when the Indian Parliament approved the Life Insurance of India Act, which nationalized the insurance industry in the country. India’s state-owned Life Insurance Corporation came into existence by combining over 245 insurance firms and provident societies.
Some of the sectors in which LIC invests-
- Chemicals and disease
- Electricity and transmission
- Electrical and electronics
- Construction and structure
- Fast-moving consumer goods
- Finance and investments
- Information technology
- Essence and mining
- Motor vehicles and ancillaries
- Oil and natural coffers
The LIC IPO’s Advantages
- Long-term investors will find the LIC IPO to be an appealing investment option.
- Individual investors and employees have a tremendous chance to participate in the LIC IPO for the long term while also profiting on the first day of trade.
- LIC policyholders may be eligible for a 10% reserve in the LIC IPO, a significant benefit.
- The LIC IPO is unlike any other IPO in terms of value. In terms of expected pricing, the IPO’s valuation is strong compared to its competitors.
- The LIC IPO will strengthen investor confidence and increase the number of Demat accounts opened.
Benefits for LIC Policyholders in LIC IPO
In 2022-2023 budget officials announced that up to 10 percent of the LIC IPO issue size would be reserved for the policyholders. LIC officials inform its policyholders to update their PAN card details to avail the advantage in the proposed public offer.
If you are a LIC policyholder and going to register for the upcoming LIC IPO, you will need a Demat account, and also your PAN card details must get updated on your policy records.
Competitive Strength of the LIC IPO
- By GWP, it is India’s largest insurance provider and the world’s fifth-largest insurer.
- Individuals can choose from various life insurance plans to fit their various insurance needs.
- Strong omnichannel distribution network, with 1.34 million agents, 3463 active Micro insurance agents, and 174 other channels, among other things
- India’s largest asset manager with a proven track record of financial performance
- Management staff with a lot of expertise and qualifications
Key Challenges for the LIC IPO
- LIC’s new policy growth is low as the company continues to lose market share to private insurers, particularly in metropolitan regions.
- Insurance and investment goods have a low-profit margin.
- It’s impossible to value LIC because its business strategy is unlike any other. The LIC takes money upfront and then promises to reimburse policyholders later. They can’t count the premiums they collect (half insurance, part investment) as income.
LIC IPO Date
Due to the pandemic, the IPO release was delayed, although it was declared in the 2021 financial budget that LIC will undertake an IPO in 2021. The IPO of around 31.6 crore shares representing 5% of the government’s interest, is expected to take place in March, with employees and insurance policyholders receiving a discount off the floor price.
The government has started launching the IPO as soon as feasible, and preparations are well underway. An IPO usually takes four to six months to complete. Given that the pre-IPO process has begun, we must wait and see if the government will fulfill the intended debut date.
You can subscribe to the IIFL Securities LIC IPO for further information on the LIC IPO date, price, and other details. When you apply for the LIC IPO, you will get all incoming announcements and the ability to track your IPO.
How to Apply for the LIC Initial Public Offering
Once the LIC IPO date has been released, you can apply for the same. However, the bidder must have a Demat account to apply for the LIC IPO. A Demat account is a mechanism for holding stock market shares and other securities. Those interested in applying for the LIC IPO should open a Demat account.
Concluding, LIC is the only government-run insurance company, and it’s also the most renowned. The LIC IPO is expected to help the market recover, allowing further expansion and development. There will be a considerable quantum oversubscription as well. Investors and policyholders are expected to profit from the listing since the insurance company would be subject to SEBI rules after the listing, resulting in enhanced transparency and efficiency.
The initial public offering (IPO) is critical for the economy. Following all of COVID-19’s difficulties, the IPO might have a favorable impact. For them, an initial public offering (IPO) is a fantastic way to put their money to work.