Arihant Capital IPO report on Life Insurance Corporation of India
Life Insurance Corporation of India (LIC) is coming out with an IPO, where the Government will raise upto INR 210 bn by selling its 3.5% stake (all via an offer for sale). LIC is the largest life insurer in India in terms of GWP, NBP, number of individual policies issued, and number of group policies issued. LIC has a market share of 61.4% in NBP (individual and group) as compared to next largest competitor who had a market share of 9.16% basis NBP (individual and group). The product offering is comprehensive and contains all kinds of insurance products: unit-linked insurance products (ULIP), saving insurance products, term insurance products, health insurance, and annuity & pension products. LIC is ranked fifth globally by life insurance GWP and 10th globally in terms of total assets. As at December 31, 2021, LIC had 2,048 branch offices and 1,559 satellite offices in India, covering 91% of all districts in India.
Valuation and Outlook
LIC's potential IPO would be structurally positive for the sector in the long run as given its reach and size, it will lead to higher awareness (benefitting private insurers as well) along with transparency in the sector, and the company. We recommend investors ‘Subscribe’ for this issue.
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