LIC IPO subscribed 1.5 times on day 4, retail segment sails through on day 3

LIC IPO subscribed 1.5 times on day 4, retail segment sails through on day 3 – Mail Bonus

New Delhi: The Indian Life Insurance Company (LIC)’s initial public offering (IPO) continued to attract bidders on the fourth day of the bidding process. The issue was fully subscribed on the second day itself.

The largest share offering on the Indian main markets since the beginning, amounting to Rs 20,557 million, is open for subscription until 9 May. Retailers can bid on the issue even on Saturday, an unusual move aimed at attracting investors.

According to data from BSE, investors made an offer for shares or 1.5 times compared to shares offered in the subscription before 14:00 on Saturday 7 May.

Of the five categories, the quotas for retailers, employees and policyholders were fully met. Part of the policyholder was registered 4.26 times and then 3.31 times the subscription for employee allocation.

The share of qualified institutional buyers was listed 0.67 times, while the allocation to non-institutional bidders was 0.87 times so far.

The issue is entirely an offer to sell about 22.13 million shares of shares from the government of India, which owns 100 percent of the insurer, but will only release about 3.5 percent of the company.

The company will sell its shares in the range of 902-949 rupees but has given its policyholders a 60 rupees discount per share, which will be offered in the issue. Qualified employees and retail bidders will receive a 45 rupee discount per item.

The company has reserved 50 percent of the net issue for eligible institutional bidders (QIBs), with non-institutional bidders (NIIs) receiving 15 percent of the issue. The remaining 35 percent of the shares have been allocated to retail bidders.

The Indian Life Insurance Company is valued at Rs 6 lakh crore, which is approximately 1.12 times its intrinsic value (EV) of Rs 5.4 lakh crore. That’s fair to their registered peers, brokers said.

AUM LIC jumped by 10 percent to Rs 37,46,404.47 at the end of the financial year 2021 from Rs 34,14,174,57 million the year before. The company’s net profit went to 2,974.14 million rupees from 2,710.48 million rupees.

For the period ended 31 December 2021, LIC had a total AUM of Rs 40,90,786.78 million and reported a profit of Rs 1,715.31 million.

The majority of securities brokers are good at IPO on LIC and have suggested subscribing to it. However, some have raised concerns about declining market share, an oversupply of futures sales of shares by the state.

LIC is the largest player in the underdeveloped Indian life insurance industry, is a trusted brand and customer-oriented business model, with a presence across India through a universal distribution system with unparalleled agency, said Hem Securities.

“Being India’s largest asset manager with a confirmed track record of financial performance and profitable growth looks like a decent investment path,” she added with a “subscriber” rating.

LIC is the fifth largest life insurer in the world in terms of gross life insurance premiums (GWP), and the 10th largest insurer in terms of total assets. At the end of FY21, LIC had a 66 percent market share in premiums for new companies (NBP).

There is concern about losing market share to the private sector and having lower profitability and revenue growth compared to the private sector, said LKP Securities, which has a “subscription” rating for the issue.

“However, we believe that the distribution advantage of LICs, the increased sales mix of direct and corporate channels, and the gradual shift to high-margin non-participating products could be potential drivers for future growth of LICs, which slows lower growth than industry,” the broker said recently. said.

LIC operates through 2048 branches, 113 branch offices and 1,554 satellite offices. It operates worldwide, including countries such as Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, the United Arab Emirates, Bahrain, Qatar, Kuwait and the United Kingdom.

LIC has raised more than 5,627 million rupees from anchor investors by allocating them 5.92 million rupees to 949 rupees per share, the insurer said in listing on the stock exchange. Of this, 4.2 million shares were allocated to 15 domestic mutual funds.

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