Biggest IPO in Indian Markets: LIC IPO subscription status on Day 1
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO was subscribed67 percent on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.99 times the portion reserved for them. The employee reserved portion has been subscribed 117 percent, while retail investors portion has been subscribed 60 percent. Non Institutional investors have subscribed 27 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
LIC's Post Public Issue Shareholding Pattern
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO was subscribed67 percent at 18:54 hours IST on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.99 times the portion reserved for them. The employee reserved portion has been subscribed 117 percent, while retail investors portion has been subscribed 60 percent. Non Institutional investors have subscribed 27 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
LIC's Key Positives
LIC is a part insurance and part investment products company. Their plans are combination of insurance and investment with a guaranteed return.
LIC has over 13.5 lakh agents who play brings most of the new business. LIC plans offer 'fixed returns' along with life insurance coverage. This makes it easy to sell by agents and brings peace of mind to the insurers.
LIC has high trust in the public for both life insurance as well as investment done with them. LIC is synonymous with insurance in India.
LIC manage asset of Rs 39 lakh crore. That is more money than the entire mutual fund industry combined. They invest these funds across stocks and bonds. They own 4 percent of all listed stocks in India and more government bonds than the RBI.
Leading insurance provider company in India and fifth largest global insurer by GWP. (Source: GEPL Capital)
Biggest IPO in Indian Markets: LIC IPO subscription status at 18:18 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO was subscribed65 percent at 18:18 hours IST on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.91 times the portion reserved for them. The employee reserved portion has been subscribed 112 percent, while retail investors portion has been subscribed 58 percent. Non Institutional investors have subscribed 26 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed64 percent, at 17:57 hours ISTon May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.9 times the portion reserved for them. The employee reserved portion has been subscribed 111 percent, while retail investors portion has been subscribed 57 percent. Non Institutional investors have subscribed 26 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
GEPL Highlights Key Challenges
LIC has poor new policy growth as they continue losing market share to private insurance players, especially in urban areas.
The margin in insurance + investment products is low.
It's very difficult to value LIC as the business model is unlike any other company. LIC collects money upfront and then promises to compensate policyholders at a later stage. The premiums they collect (part insurance and part investment) cannot be recognized as revenue.
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed64 percent, at 17:39 hours ISTon May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.89 times the portion reserved for them. The employee reserved portion has been subscribed 110 percent, while retail investors portion has been subscribed 57 percent. Non Institutional investors have subscribed 25 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status on Day 1
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO was subscribed63 percenton May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.84 times the portion reserved for them. The employee reserved portion has subscribed 104 percent, while retail investors portion has been subscribed 56 percent. Non Institutional investors have subscribed 25 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
Peer Comparison
Biggest IPO in Indian Markets: LIC IPO subscription status at 16:33 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed62 percent by 16:33 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.8 times the portion reserved for them. The employee reserved portion has been subscribed 100 percent, while retail investors portion has been subscribed 55 percent. Non Institutional investors have subscribed 25 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
LKP Research Views on LIC IPO
India’s life insurance industry is expected to grow rapidly, owing to a relatively underpenetrated market and expanding awareness, which presents a multi-year growth opportunity. LIC has been providing life insurance in India for over 65 years and is the country’s biggest life insurer, with a significant brand value advantage. "There are concerns about losing market share to private players and having lower profitability and revenue growth when compared to private players. However, we believe that LIC’s distribution advantage, increasing sales mix of direct and corporate channels, and a gradual shift to high margin Non- participating products could be possible drivers for LIC’s future growth, negating lower than industry growth rates," said LKP.
At the upper price band, the brokerage said the stock is priced at 1.1x of its 2QFY22 Indian Embedded value (Market capitalization/Embedded value: Rs 6 trillion/Rs 5.39 trillion), which is at a significant discount to its listed peers. "Currently listed insurance companies trade at Market capitalization/EV multiple of ~2.8x. LIC has a marquee anchor list of investors and we recommend subscribe to the LIC IPO."
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed61 percent by 16:18 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.79 times the portion reserved for them. The employee reserved portion has been subscribed 98 percent, while retail investors portion has been subscribed 54 percent. Non Institutional investors have subscribed 25 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
Persistency Ratio
Persistency ratio is the proportion of business that is retained from the business underwritten and is measured in terms of the number of policies and premiums underwritten.
The company believes that the 13th month Persistency Ratio is an important metric to assess the quality of its sales because it is the first opportunity to assess the likelihood of premiums being paid beyond the first year, thereby reaffirming the policyholder’s decision to buy the insurance policy and thus reflecting the quality of business written. A high level of 49th month and 61st month Persistency Ratios reflects the success of products with a long-term horizon.
Maintaining high Persistency Ratios is important for company's results of operations, as a large block of in-force policies provides it with regular revenue in the form of renewal premiums. Therefore, decreases in Persistency Ratios would have an adverse effect on financial condition, results of operations and cash flows.
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed59 percent by 16:03 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.77 times the portion reserved for them. The employee reserved portion has been subscribed 96 percent, while retail investors portion has been subscribed 53 percent. Non Institutional investors have subscribed 13 percent of their portion while qualified institutional buyers bought 33 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status at 15:54 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed57 percent by 15:54 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.76 times the portion reserved for them. The employee reserved portion has been subscribed 94 percent, while retail investors portion has been subscribed 53 percent. Non Institutional investors have subscribed 22 percent of their portion while qualified institutional buyers bought 22 percent of allotted quota of 3.95 crore shares, till now.
LIC's Distribution Network
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed54 percent by 15:39hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.69 times the portion reserved for them. The employee reserved portion has been subscribed 91 percent, while retail investors portion has been subscribed 52 percent. Non Institutional investors have subscribed 22percent of their portion while qualified institutional buyers bought 16 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed51 percent by 15:33 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.69 times the portion reserved for them. The employee reserved portion has been subscribed 90 percent, while retail investors portion has been subscribed 52 percent. Non Institutional investors have subscribed 22percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
What Is Driving The LIC Business
LIC IPO Process Time Line
Biggest IPO in Indian Markets: LIC IPO subscription status at 15:18 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed50 percent by 15:18hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.66 times the portion reserved for them. The employee reserved portion has been subscribed 86 percent, while retail investors portion has been subscribed 51 percent. Non Institutional investors have subscribed 21 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
Top 6 Players New Business Premium (NBP)
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed48 percent by 15:09hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.64 times the portion reserved for them. The employee reserved portion has been subscribed 85 percent, while retail investors portion has been subscribed 51 percent. Non Institutional investors have subscribed 12 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed47 percent by 15:03hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.61 times the portion reserved for them. The employee reserved portion has been subscribed 84 percent, while retail investors portion has been subscribed 49 percent. Non Institutional investors have subscribed 11 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC's Key Competitive Strengths
Fifth largest life insurer globally by GWP and the largest player in the fast growing and underpenetrated Indian life insurance sector
Trusted brand and a customer-centric business model
Cross-cyclical product mix that caters to diverse consumer needs and an individual product portfolio that is dominated by participating life insurance policies
Presence across India through an omni-channel distribution network with an unparalleled agency force
Harnessing technology capabilities to support customer connect and drive operating efficiencies
Largest asset manager in India with an established track record of financial performance and profitable growth
Robust risk management framework
Highly experienced and qualified management team, distinguished board and strong corporate governance framework
Trend in Total Premium for Overall Industry (Rs bn)
Biggest IPO in Indian Markets: LIC IPO subscription status at 14:45 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed46 percent by 14:45 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.58 times the portion reserved for them. The employee reserved portion has been subscribed 80 percent, while retail investors portion has been subscribed 48 percent. Non Institutional investors have subscribed 11 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC Subsidiary Companies
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed45 percent by 14:30 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.54 times the portion reserved for them. The employee reserved portion has been subscribed 77 percent, while retail investors portion has been subscribed 47 percent. Non Institutional investors have subscribed 11 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC and Its Market Share
LIC and Its Market Share
Biggest IPO in Indian Markets: LIC IPO subscription status at 14:18 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed44 percent by 14:18 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.50 times the portion reserved for them. The employee reserved portion has been subscribed 76 percent, while retail investors portion has been subscribed 47 percent. Non Institutional investors have subscribed 9 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
Salient Features of the LIC FPO
Life Insurance Corporation of India (LIC), a multi-generational trusted brand and India’s largest life insurer & the biggest asset manager, launched an IPO to raise around Rs21,000 crore, which opened today and closes on May 9, 2022. The price band is Rs902 - 949 per share.
With continuing volatility in the global equity market (arising from the ongoing Russia-Ukraine conflict, surge in crude & commodities prices and reemergence of Covid-19 cases in China), LIC has reduced the IPO size from earlier 5 percent(as mentioned in the DRHP) to now 3.5%. Even with this reduced size, the LIC IPO will be the biggest domestic issue till date.
The IPO comprises only the OFS portion, thus the company will not receive any proceeds from the issue. (Choice Broking)
Biggest IPO in Indian Markets: LIC IPO subscription status
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed43 percent by 14:12 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.47 times the portion reserved for them. The employee reserved portion has been subscribed 75 percent, while retail investors portion has been subscribed 46 percent. Non Institutional investors have subscribed 10percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status at 14:06 afternoon
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed42 percent by 14:06hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.43 times the portion reserved for them. The employee reserved portion has been subscribed 74 percent, while retail investors portion has been subscribed 45 percent. Non Institutional investors have subscribed 10percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC Grey Market Premium Drops
Life Insurance Corporation of India is trading at a premium of Rs 65 per share in the grey market on May 4, falling compared Rs 85 on May 3. as per the IPO Watch.
Biggest IPO in Indian Markets: LIC IPO subscription status at 13:51 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed41 percent by 13:51 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.39 times the portion reserved for them. The employee reserved portion has been subscribed 71 percent, while retail investors portion has been subscribed 43 percent. Non Institutional investors have subscribed 9 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC - Largest Assets Manager in India
LIC is the largest assets manager in India with an AUM of Rs 40.1 trillion on a standalone basis, which was (i) more than 3.2x the total AUM of all private life insurers in India, (ii) ~15.6x more than the AUM of the second-largest player in the Indian life insurance industry, (iii) more than 1.1x the entire Indian mutual fund industry’s AUM, and (iv) 17 percentof India’s estimated GDP for FY22. LIC’s investments in listed equity represented ~4% of the total market capitalization of NSE, says Reliance Securities.
Biggest IPO in Indian Markets: LIC IPO subscription status at 13:39 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed40 percent by 13:39 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.36 times the portion reserved for them. The employee reserved portion has been subscribed 69 percent, while retail investors portion has been subscribed 42 percent. Non Institutional investors have subscribed 9 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
LIC IPO Valuations
"On the upper price band of Rs 949 and the embedded value (EV) per share of Rs 853 for 9MFY21, the price-to-EV ratio works out to be 1.1x. While the industry P/EV is at ~2.5x. We believe valuation forLICis reasonable keeping in mind the valuations at which the peers are trading and the average industry. Thediscount in the multiple forLICcould be considering its current dependence on the traditional product segment, lower VNB margins, higher employee expense, and agency distribution mix compared to its private peers," says Motilal Oswal.
The brokerage expects the company to focus on its strong growth momentum by gaining its market share and focusing more on underwriting quality & the high margin product mix. "Given the growth prospects for the pension/ annuity segment and the company's position as the market leader in the insurance sector, the company’s valuation will be at par with the private peers."
Biggest IPO in Indian Markets: LIC IPO subscription status at 13:27 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed38percent by 13:27 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.29 times the portion reserved for them. The employee reserved portion has been subscribed 67 percent, while retail investors portion has been subscribed 40 percent. Non Institutional investors have subscribed 9 percent of their portion while qualified institutional buyers bought 3 percent of allotted quota of 3.95 crore shares, till now.
Biggest IPO in Indian Markets: LIC IPO subscription status at 13:24 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed37percent by 13:24 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.28 times the portion reserved for them. The employee reserved portion has been subscribed 67 percent, while retail investors portion has been subscribed 40 percent. Non Institutional investors have subscribed 9 percent of their portion while qualified institutional buyers bought 6,585 shares against allotted quota of 3.95 crore shares, till now.
QIBs Yet To Show Strong Participation in LIC IPO
The portion set aside for qualified institutional buyers has to subscribeat least 90 percent to get the entire issue sail through. So far they have bid for 6,585 equity shares against the allotted quota of 3.95 crore equity shares.
Consider This Risk While Subscribing To LIC IPO
A significant proportion of Corporation’s total new business premiums are generated by participating products and single premium products, and any regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on company’s business, financial condition, results of operations and cash flows, says Hem Securities.
Biggest IPO in Indian Markets: LIC IPO subscription status at 13:12 Hours IST
The biggest initial public offering (IPO) in the history of Indian markets, LIC IPO is subscribed36percent by 13:12 hours IST, on May 4, the first day of bidding. The LIC policyholders lead initial bout of buying in insurer's IPO as they have subscribed 1.24 times the portion reserved for them. The employee reserved portion has been subscribed 64 percent, while retail investors portion has been subscribed 39 percent. Non Institutional investors have subscribed 8 percent of their portion while qualified institutional buyers bought 6,585 shares against allotted quota of 3.95 crore shares, till now.