LIC IPO

IPO Details:

Price Band: 902-949

Cutoff Price: 949

About Company:

LIC has been providing life insurance in India for over 65 years and is the largest life insurer in India, with a 61.6% market share in terms of premiums (or GWP), a 61.4% market share in terms of New Business Premium (or NBP), a 71.8% market share in terms of number of individual policies issued, a 88.8% market share in terms of number of group policies issued for the nine months ended December 31, 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at December 31, 2021.

Products/Service Offering:

LIC has a broad, diversified product portfolio covering various segments across individual products and group products. Individual products comprise:

1. Participating insurance products

2. Non-participating products, which include:

   1. Savings insurance products.

   2. Term insurance products.

   3. Health insurance products.

   4. Participating insurance products.

   5. Unit linked insurance products.

Individual products include specially designed products for specific segments, such as special products for women and children and Micro Insurance products. In addition, LIC offers riders that provide additional benefits along with the base product to cover for additional risks, such as accidental disability, death, critical illness and premium waiver on the death of the proposer.

Financial Performance:

Revenue of the company is growing also Profit and EPS is increasing. Company is matured and market leader in life insurance business. With estimated EPS of FY2, LIC is priced at 262 which is very high.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

Competitors Comparison:

Considering listed companies that are in the same business, LIC seems to be overvalued in terms of relative valuation.

Grey Market Premium:

Our view: GMP of the IPO is decent but overall the company looks overvalued in terms of valuation. I will subscribe to this IPO only for Listing Gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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