LIC IPO: Second day of bidding, issue subscribed 1.03 times, Policyholders 3.11 times, Staff 2.21 times, Retail 93%, QIB 40% & NII 47%

The initial public offering of country's largest life insurance company Life Insurance Corporation of India has subscribed 1.03 times, receiving bids for 16.68 crore equity shares against offer size of 16.2 crore equity shares on May 5, the second day of bidding.

The portion set aside for policyholders portion has subscribed 3.11 times, staff 2.21 times, and retail investors subscribed 93 percent, while QIBsbid for 40 percent shares of their allotted quota and NII lapped up 47percentof their portion.

Adverse variation in persistency metrics could have a material effect on LIC’s financial performance

Change in regulations could adversely impact business

LIC is highly dependent on individual agents. If LIC is unable to retain and recruit individual agents on a timely basis and at reasonable cost, there could be a material adverse effect on its operations.

If actual claims experienced and other parameters are different from the assumptions used in pricing its products and setting reserves for its products, it could have a material adverse effect on LIC business.

A significant proportion of LIC’s total new business premiums are generated by participating products and single premium products, and any significant regulatory changes or market developments that adversely affect sales of such products could have a material adverse effect on its business.

The initial public offering of country's largest life insurance company Life Insurance Corporation of India has subscribed 1.02 times, receiving bids for 16.48crore equity shares against offer size of 16.2 crore equity shares.

The portion set aside for policyholders portion has been subscribed 3.07 times, staff 2.2 times, and retail investors subscribed 92 percent, while QIBsbid for 40 percent shares of their allotted quota and NII lapped up 47 percentof their portion.

The initial public offering of country's largest life insurance company Life Insurance Corporation of India has subscribed 1.01 times, receiving bids for 16.29crore equity shares against offer size of 16.2 crore equity shares.

The portion set aside for policyholders portion has been subscribed 3.03 times, staff 2.15 times, and retail investors subscribed 91 percent, while QIBsbid for 40 percent shares of their allotted quota and NII lapped up 46percentof their portion.

LIC has a risk management framework where risk identification, measurement, and mitigation are undertaken through structured procedures and various Board-approved policies and controls. It has an enterprise risk management (“ERM”) cell with the Chief Risk Officer heading the cell and a team of officers supporting him at different levels.

LIC proactively manages its financial risks through diversification of investment portfolio across asset classes, regular monitoring of interest rates to address market volatility, stress and resilience testing of the investment portfolio, matching of assets and liabilities on a quarterly basis at the line of the business level where line of business liabilities account for over 5 percentof total liabilities, conservative management of reserves, and proactively reviewing the business mix to maintain alignment with customer needs and preferences.

LIC’s large, geographically diversified customer base and a participating product dominated portfolio serve as a natural hedge. The company’s lower policy ticket sizes reduces volatility. (Source: KRChoksey Research)

The initial public offering of country's largest life insurance company Life Insurance Corporation of India has fully subscribed, receiving bids for 16.24crore equity shares against offer size of 16.2 crore equity shares.

The portion set aside for policyholders portion has been subscribed 3.02 times, staff 2.14 times, and retail investors subscribed 91 percent, while QIBsbid for 40 percent shares of their allotted quota and NII lapped up 46percentof their portion.

LIC’s operating metrics are largely comparable to private players. LIC’s operating expense ratio in FY21 was 8.7 percent while for private players it is 12.6 percent. Total cost ratio for LIC in FY21 was 14.2 percent while it is 16.9 percentfor private players. LIC’s persistency ratio is in-line with private players, said KRChoksey Research.

The initial public offering of country's largest life insurance company Life Insurance Corporation of India has subscribed 98 percent, receiving bids for 15.81 crore equity shares against offer size of 16.2 crore equity shares.

The portion set aside for policyholders portion has been subscribed 2.92 times, staff 2.08 times, and retail investors subscribed 88 percent, while QIBsbid for 40 percent shares of their allotted quota and NII lapped up 45 percentof their portion.

Mangalam Ramasubramanian Kumar is the Whole-time Chairperson of LIC. He joined LIC in the year 1983 and has experience in the insurance sector. Previously, he was the zonal manager of South, North-Central and North zones of LIC and has also headed the personnel and pension & group schemes department.

Pankaj Jain is a Government Nominee Director of the Corporation and is an officer at the Indian Administrative Service from the 1990 batch. He is presently serving as a secretary in the Ministry of Petroleum, Government of India. He is a qualified cost accountant from the Institute of Cost Accountants of India and a member of the International Financial Services Centres Authority.

Raj Kumar is the Managing Director of the Corporation. He joined the Corporation in the year 1984 as an apprentice officer and has experience in the insurance sector. He has also served as the chief executive officer of LIC Mutual Fund Asset Management Limited.

Siddhartha Mohanty is the Managing Director of the Corporation. He holds bachelor’s degree in law and a master’s degree of arts (political science) from Utkal University, Bhubaneswar, Odisha. He previously served as COO and CEO of LIC Housing Finance Limited and has held various other key positions.

Ipe Mini is the Managing Director of the Corporation. She holds master’s degree of commerce from the Faculty of Commerce and Management Studies, Andhra University. Previously, she was also the shareholder director of Central Bank of India.

Bishnu Charan Patnaik is the Managing Director of LIC. He joined LIC in the year 1985 and has experience in the insurance sector and has handled several positions in LIC.

Dr Ranjan Sharma is the Independent Director of LIC. He is experienced in the field of academics.

Vinod Kumar Verma is the Independent Director of LIC. He is experienced in electronics business. He is an Independent Director of LIC from October 29, 2021. (Source: Angel Broking)