KR Choksey IPO report on Life Insurance Corporation of India
LIC is India's only government-owned insurance provider company. It is the largest company in the Indian insurance space with a market share of above 61.6% in terms of premiums and 61.4% in New Business Premium as on 31st December, 2021. The company offers participating insurance products and non-participating products, i.e., unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products. As of December 31, 2021, it has a total AUM of INR 40.1 tn on standalone basis. The company has 8 Zonal offices in Delhi, Mumbai, Kolkata, Chennai, Kanpur, Patna, Bhopal, and Hyderabad. As of December 31, 2021, the firm operates through 2048 branches, 113 divisional offices, and 1,559 Satellite Offices. It operates globally in Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom. As of March 31, 2021, it has 1.35 Mn life insurance agents with the largest agent network.
Valuation and Outlook
We expect 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. As a result, we recommend to subscribe the IPO for listing as well as long term gains.
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