IPO LIC: The initial public offering (IPO) of Life Insurance Corporation of India was opened for subscription yesterday and will remain open for subscription until May 9, 2022, also on Saturday, said a notice on the National Stock Exchange of India Ltd. The IPO LIC remains open on Saturday (May 7) between 10 a.m. and 7 p.m. This unusual move comes at a time when the government is seeking to attract investors including retail buyers for the nation’s largest stock sale. The government will sell a 3.5 per cent stake entirely through a sale offer (OFS). Of which 10 per cent of the shares are reserved for LIC insureds and 0.7 per cent for LIC employees. In addition, 31.25 percent is reserved for domestic (retail) investors. On May 2, LIC withdrew Rs 5,630 crore from anchor investors, diluting about 59.3 million shares to 123 investors at Rs 949 per share. Marquee investors, domestic mutual fund companies, domestic insurance companies, corporations and NPS were part of the anchor allotment.
Also read: LIC IPO opens today: India’s biggest live online issue right now, here’s how to buy LIC IPO shares
IPO LIC subscription status
The IPO LIC received a 67 percent subscription on day 1 of the opening of the offering, with strong demand from policyholders, employees and retail investors. LIC insurers led the meeting as they slashed (1.99 times) their share of the offer. The share allotted to employees was also fully subdued (1.17 times) on the first day itself while retail investors closed 60 per cent of their allotted share.
The share reserved for non-institutional investors was subdued 0.27 times while qualified institutional buyers achieved 33 per cent of their allotted share on day 1. A total of 10,86,45,360 shares received the bids against the offer 16.20, 78,067 shares open (excluding shares offered to anchor investors), from 7:00 pm on the stock exchanges.
LIC IPO: Price range
The company has set a price range of Rs 902-949 for the public issue, which will close on 9 May. At the higher price range, the insurer will have a market capitalization of Rs 6 lakh crore.
Also read: LIC IPO Opens Subscription Today: GMP, Financials, Review; Do you have to ask?
LIC IPO: Lot size
Investors can bid for a minimum of 15 equity shares (1 lot) and multiply thereafter.
LIC IPO: GMP Today
LIC IPO has ordered a 9 per cent premium on its top price range in the gray market as the issue of Rs 21,000 crore opens for the subscription today. In fact, the commercial gray market premium has increased by 5 percent, quoted last week. According to data from IPO Watch and IPO Wala, LIC traded at a premium of Rs 85 per share on the gray market on Wednesday, against Rs 45 premium last Thursday. This means, at the upper end of the price range, LIC shares are trading at Rs 1,034 (Rs 949 + Rs 85), as LIC IPO GMP today is Rs 85, which is about 9 per cent above the issue price.
The company offers participating and non-participating insurance products such as unit-linked insurance products, life insurance products, term insurance products, health insurance, and annuity and pension products. As of December 31, 2021, LIC had a total asset under management of Rs 40.1 lakh crore on a standalone basis.
LIC IPO: Do you have subscribers?
Brokerages have given a thumbs up to IPOs advising investors to “subscribe” to the issue.
Brokerage firm LKP Securities said: “India’s life insurance industry is expected to grow rapidly, due to a relatively under-penetrated market and expanding awareness, which presents an opportunity for growth. LIC has been providing life insurance in India for over 65 years and is the largest life insurer in the country, with a significant brand value advantage.There are concerns about the loss of market share in private players and have lower profitability and revenue growth compared to private players ”.
“However, we believe that the advantage of LIC distribution, the increase in the sales mix of direct and corporate channels, and a gradual change to a high margin Non-participating products may be possible drivers for the future growth of LIC. LIC, denying the industry’s lowest growth rates.At the highest price range, the stock price is 1.1x its value 2QFY22 Indian Embedded (Market Capitalization / Embedded Value: Rs6 trillion / Rs5.39 trillion), which is at a significant discount to its listed companies.Currently listed insurance company trades at Market Capitalization / EV multiple of ~ 2.8x.LIC has a well-marked list of investors and we recommend SUBSCRIBE to the IPO LIC, ”the IPO note said.
Yesha Shah, Head of Equity Research, Samco Securities, said: “From the valuation point of view, at the upper end of the issue price, LIC is priced at 1.1x embedded value, which is at a significant discount for Given the attractive valuation, the disadvantage here seems to be limited.In addition, the fact that a discount has also been offered to retail investors is the icing on the cake.Considering all these factors, we have a SUBSCRIBE valuation in this IPO “.
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