{"id":3206,"date":"2022-02-28T16:08:37","date_gmt":"2022-02-28T16:08:37","guid":{"rendered":"https:\/\/www.paytmmoney.com\/blog\/?p=3206"},"modified":"2022-02-28T16:09:18","modified_gmt":"2022-02-28T16:09:18","slug":"lic-ipo-3-things-to-know","status":"publish","type":"post","link":"https:\/\/www.paytmmoney.com\/blog\/lic-ipo-3-things-to-know\/","title":{"rendered":"LIC IPO: Why It\u2019s A Crucial Moment For The Market"},"content":{"rendered":"

The Indian stock market has seen a flurry of initial public offerings (IPOs<\/a>) in the past year. However, the public offering of Life Insurance Corporation of India (LIC) has generated the most excitement, and for the right reasons.<\/span><\/p>\n

The much-awaited IPO of India\u2019s largest insurer is expected to be the biggest public offering in Indian history.\u00a0<\/span><\/p>\n

According to the draft red herring prospectus (DRHP) filed by LIC ahead of its listing, it is also the fifth-largest life insurance company in the world.\u00a0<\/span><\/p>\n

The company\u2019s embedded value is Rs 5.39 lakh crore as of September 30, 2021, according to the DRHP.\u00a0<\/span><\/p>\n

1. How it started<\/b><\/h2>\n

Before the IPO takes place this month, take a look at the company\u2019s 66-year history.<\/span><\/p>\n

LIC was formed in September 1956, after the Parliament passed the Life Insurance Corporation Act in June 1956 and nationalised the insurance sector. 245 private life insurance companies were merged to form the behemoth, with the Union Government making a capital contribution of Rs 5 crore.\u00a0\u00a0<\/span><\/p>\n

LIC\u2019s slogan – Yogakshemam Vahamyaham – is taken from a passage in the Bhagvad Gita.\u00a0<\/span><\/p>\n

According to the LIC\u2019s official website, it was created with \u201cthe objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.<\/span><\/p>\n

Since then, LIC has become a household name and currently has 29 crore policyholders.\u00a0<\/span><\/p>\n

Today, LIC has a massive network of offices, with eight zonal offices, 113 divisional offices, 74 customer zones, 2,048 branch offices and 1,546 satellite offices.\u00a0<\/span><\/p>\n

2. What you need to know about the IPO<\/b><\/h2>\n

The government will sell 5% of its stake in LIC, by putting up 31.6 crore shares on offer. At present, the government owns 100% of the company.\u00a0<\/span><\/p>\n

In its DRHP, LIC said it will reserve up to 10% of the total shares on offer for policyholders<\/a>, but did not specify the allotment and quantum of discount.\u00a0<\/span><\/p>\n

\u201cThe aggregate of reservations for eligible policyholder(s) shall not exceed 10% of the offer size,\u201d the DRHP stated.\u00a0<\/span><\/p>\n

5% of the public offer will be reserved for employees, and 35% for retail investors.\u00a0<\/span><\/p>\n

3. Why it\u2019s an important moment for the market<\/b><\/h2>\n

Due to its massive size, it\u2019s only natural that retail investors will be eagerly awaiting this IPO.\u00a0<\/span><\/p>\n

LIC has a 64.1% market share in terms of premium and a 66.2% market share in terms of new business premium, according to the DRHP.<\/span><\/p>\n

SBI Life Insurance, HDFC Life Insurance and ICICI Prudential Life Insurance are the only other listed life insurance companies.\u00a0<\/span><\/p>\n

The IPO is also crucial for the economy, since the proceeds are expected to help the government meet its disinvestment target of Rs 78,000 crore for FY22.<\/span><\/p>\n

Needless to say, this is a significant milestone for the stock market and the economy.\u00a0<\/span><\/p>\n

Do follow Paytm Money for more updates on the LIC IPO!<\/span><\/p>\n

 <\/p>\n

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. This content is purely for informational purposes and in no way an advice or recommendation. Paytm Money Ltd SEBI Reg No. Broking \u2013 INZ000240532. NSE (90165), BSE(6707) Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi \u2013 10019.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

The Indian stock market has seen a flurry of initial public offerings (IPOs) in the past year. However, the public offering of Life Insurance Corporation of India (LIC) has generated the most excitement, and for the right reasons. The much-awaited IPO of India\u2019s largest insurer is expected to be the biggest public offering in IndianContinue reading “LIC IPO: Why It\u2019s A Crucial Moment For The Market”<\/span><\/a><\/p>\n","protected":false},"author":27,"featured_media":3207,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-classic-ns.php","format":"standard","meta":{"footnotes":""},"categories":[7,15],"tags":[],"class_list":["post-3206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights","category-ipo"],"_links":{"self":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/3206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/comments?post=3206"}],"version-history":[{"count":0,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/3206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media\/3207"}],"wp:attachment":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media?parent=3206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/categories?post=3206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/tags?post=3206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}