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Factbox: Four key facts about India’s record-breaking LIC IPO as shares tumble on debut

Ashishkumar Chauhan, MD and CEO of Bombay Stock Exchange (BSE), Mangalam Ramasubramanian Kumar, Chairman of Life Insurance Corporation of India (LIC), and Tuhin Kanta Pandey, Secretary Department of Investment and Public Asset Management (DIPAM), pose with a bronze Replica of the Charging Bull of Wall Street, following the company’s IPO ceremony on the Bombay Stock Exchange (BSE) in Mumbai, India May 17, 2022. REUTERS/Niharika Kulkarni

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May 17 (Reuters) – Life Insurance Corporation of India (LIFI.NS) fell nearly 8% in its market debut on Tuesday, despite the country’s biggest-ever IPO being oversubscribed at the top of the price range.

The government raised about $2.7 billion from the sale of a 3.5 percent stake in state-owned LIC, which controls much of the market. Continue reading

The listing comes as the Indian IPO market slows, with first quarter proceeds from India’s primary markets totaling $995 million from the top three IPOs, compared to $2.57 billion a year ago , EY said in a report Monday.

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Here are four key points regarding listing LIC:

PRICING

The price range for the issuance of LIC has been set at between 902 and 949 rupees per share. LIC offered staff and retail investors a discount of Rs.45 per share while policyholders were offered a discount of Rs.60 per share.

Investors bid for 478.4 million shares compared to a total of 162.1 million shares offered. Apart from retail investors and institutional investors, a group of foreign investors and several domestic mutual fund houses had applied for its anchor book.

INVESTMENTS

The insurer has Rs.9.8 trillion invested in shares as of December 2021 and around 4% of the total market capitalization of the National Stock Exchange is held by LIC.

Assets under management stand at Rs 39.56 trillion as of 30 September 2021 – more than triple the total assets under management of all private life insurers in Asia’s third largest economy.

COMPETITION

The company is a household name in India and has a majority market share. However, new business growth has been muted compared to some other players, and increasing competition from private insurers has meant the company has lost some ground.

LIC’s market share has fallen to 63% from 66% in 2019, according to the insurance regulator. The company now expects market share to settle at current levels as it strengthens its digital presence and expands distribution channels.

CUSTOMER BASE AND DISTRIBUTION NETWORK

LIC has sold over 280 million policies and has the largest agent network in the country with 1.33 million registered agents as of December.

The agent network has played a key role in attracting policyholder interest ahead of the IPO.

The Mumbai-based insurer also has the highest brand value at $8.65 billion in FY21, according to a report by Brand Finance, which also ranked it the 10th most valuable insurance brand globally.

($1 = 77.5570 Indian Rupees)

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Reporting by Nupur Anand in Mumbai and Aftab Ahmed in New Delhi; Editing by David Evans

Our standards: The Thomson Reuters Trust Principles.

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