According to the capital market regulator, the government has filed a draught Red Herring Prospectus (DRHP) to sell a 5% stake in the Life Insurance Corporation of India or LIC, the largest ever public offering. People who work for the country’s biggest Insurance company receive a reduction in the base rate. The LIC IPO is a government-sponsored sale with no new shares issued.
The government owns over 632.49 million shares, with each a face value of Rs. 10. It is the largest in the Indian Stock Market history and has a market value similar to RIL and TCS.
More about the company
With more than 64.1% market share, LIC is the world’s largest Insurance company concerning home-market share. According to a CRISIL analysis, it is also the only Insurance company globally that delivers the best return on Equity at 82%, making it the third-largest life insurer globally.
Preliminary prospectus
A preliminary prospectus for foreign investors to buy LIC shares must include quarterly earnings, like the December quarter and a breakdown of the company’s assets under management. Before the current fiscal year ends, the administration intends to conclude the public issue by raising Rs. 4,000 to Rs. 1 lakh crore.
Significance
According to Bloomberg News, LIC might raise $10 billion from its first Initial Public Offering, with a minimal dilution of 5%. In this case, this would be the third-biggest IPO ever to involve an insurer in the world, according to the Financial Times. The LIC IPO price band is between Rs. 902 to Rs. 949 per equity share.
How to apply?
With banks and brokers going digital, it is simple to apply for LIC IPO. Having a Demat Account is mandatory to participate. As a policyholder, you should be the first Demat Account holder. If it is a Joint Account, you should be the first or primary holder. Link your PAN Card to the LIC and Demat Account. If you lack one, submit your primary KYC documents like identity, age proofs, bank details, signature proofs, etc.
Aiming to attract more small retail traders, the government is considering offering policyholders across the country up to 10% of the LIC’s first IPO shares. It may take place on March 11, 2022, with the general public contributing. It will be the largest involvement in Indian markets in history.
Conclusion
Evaluate the firm’s operation over the long term before investment. It is imperative to be cautious if its revenues have risen dramatically in the months before its first IPO. If a company’s revenue has increased steadily over time, it is a successful enterprise.