LIC IPO

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The LIC IPO is supposed to be announced anytime now. As per latest LIC IPO news, LIC is expected to announce the date for IPO very soon with everybody eagerly waiting for more details on LIC IPO price.

About LIC

LIC stands for Life Insurance Corporation, and was founded in 1956. The Indian Parliament passed the Life Insurance Corporation Act on 19th June 1956, and subsequently, the Life Insurance Corporation was created on 1st September 1956. At the time of creation, LIC had 5 zonal offices, 33 divisional offices, and 212 branch offices. LIC has grown by leaps and bounds over the years and today, it has 2048 computerized branch offices, 8 zonal offices, 113 divisional offices, with all branches connected via a Metro Area Network. It has offices in several important cities in India for instance, New Delhi, Kolkata, Chennai, Bengaluru, Ahmedabad, Hyderabad, Pune, Gurgaon, Cochin etc, with headquarters in Mumbai.

About LIC IPO

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The Government of India is planning to reduce its holdings in LIC with the LIC IPO sometime in early 2022. LIC is planning to file for the Red Herring Prospectus with SEBI which will give the public more details about the value, number of shares for sale. Financial Minister Ms. Nirmala Sitharaman has set the deadline for listing IPO of LIC as end of March 2022.

There is even a speculation that up to 10% of LIC’s IPO shares could be offered to the policy holders across India

Strengths of LIC:

Large LIC Agents Network: Huge number of Individual LIC Agents - over 12 Lakhs as on 31st March 2020, source:  https://licindia.in/Top-Links/About-Us/Operations#

This is an impressive achievement considering the combined total number of Insurance Agents of Private life insurers in India is around 11 Lakhs.

Also, LIC has over 1 Lakh employees.

Great Reach in India: Presence of LIC is in almost every nook and corner of India and is a very stable and well-respected Life Insurer.

Insurance Plans: LIC offers several different types of Insurance Plans like Pension Plans, Unit Linked Plans, Micro Insurance Plans, Health Plans etc along with Group Schemes. These offer flexibility to choose a plan suitable to the specific needs for each person or family.

Huge Market Share: As per Annual report of LIC 2020-21, the market share of LIC stood at 66.18% in Total First Year Premium and 74.58% in number of new policies as on 31st March 2021.

Source:  https://licindia.in/getattachment/Bottom-Links/annual-report/LIC-Annual-Report-2021.pdf.aspx

Threats for LIC:

The Insurance business has grown with several Private players in the market offering different insurance plans.

Being a large Public Sector Unit organization, it is a question mark if LIC can keep up with the fast-paced world, and if there would be greater autonomy from the Indian Government after the listing.

Frequently Asked Questions

Peak Margin-Enrich

It is expected to be announced very soon. It has not yet been decided (as of Jan 25 2022)

The Issue Type is Book Building Offer.

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There is a speculation that employees of LIC might get a discount price to participate in LIC’s equity. The ownership of LIC will not change since the Government is not going to sell more than 10% of its stake. It will still be government owned. Hence employees need not be worried that it is a move to privatize LIC.

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No, it will not affect the policyholders in any negative way. On the other hand, it is widely speculated that LIC’s policyholders could get a special quota in the upcoming LIC IPO.

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In order to be eligible for the LIC IPO, policyholders have to link their policies to their PAN number. In order to apply for the IPO, they must also ensure they have a DEMAT account and UPI ID linked to a bank account with enough funds.

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As of today, (Jan 25 2022), the other details are still to be announced along with the IPO opening date.

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At present, the details about the possible price range of the IPO are still awaited. But all the details are expected to be announced before the end of March 2022, at the very latest.

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