LIC IPO: The Public Issue of Life Insurance Corporation of India (LIC) is going to open for subscription on 4th May 2022 and will be open for bidders till 9th May 2022. The Government of India (GoI) has fixed the LIC IPO price band. from 902 949 per equity share. According to market experts, the share price of LIC is continuously climbing in the gray market and today it is trading at a premium of Rs. 92 i.e. LIC IPO GMP is today 92.
Tag ‘Subscribe’ to LIC IPONarendra Solanki, Head – Equity Research (Fundamentals) Anand Rathi Shares & Stock Brokers lists 3 reasons to apply for a public issue:
1]Market Leader: LIC IPO looks attractive as it has around 300 million policyholders and 1.3 million agents, which constitutes 55 per cent of the total agent network. The insurance giant has a market share of around 64 per cent of the sector’s total insurance premiums in FY2011. Life insurance has been one of the fastest growing sectors in the insurance market of India and has recorded maximum premium income 5.7 trillion in FY20. Out of this, LIC wrote the premium which was approximately equal to 3.8 trillion. As of 30 September 2021, LIC of India was India’s largest asset manager, with assets under management (AUM) of $39.55 trillion, more than 3.3 times the combined AUM of all private life insurers in India and 1.1 times the overall AUM More Indian mutual fund industry. LIC’s investment in listed stocks was about 4 per cent of the entire market capitalization of NSE as of September 21.
2]India’s insurance sector has long been the least intrusive: India’s insurance penetration was pegged at 4.2 per cent in FY2011, with life insurance penetration at 3.2 per cent and non-life insurance at 1.0 per cent. In terms of insurance density, India’s overall density in FY 2011 was US$78. These low penetration and density rates reveal the uninsured nature of large sections of the population in India and the presence of insurance gaps. Record low penetration is expected to drive further growth for the already market leader Life Insurance Corporation of India. LIC, which controls nearly two-thirds of the market, performs well in terms of agent productivity and cost-to-premium ratio. The insurer has the highest commission-to-premium ratio of 5.5 percent, compared to an average of 4.4 percent for the top five private companies.
3]Dividend paying stocks allow investors to profit in two ways: Through an increase in the stock price and distributions made by the company. In addition to providing consistent income, many dividend-paying stocks are in defensive areas that can weather an economic downturn with less volatility. Life Insurance Corporation of India is wholly owned and controlled by the Government of India. Its remaining major shareholders and investors in the company can expect a healthy dividend from the company once the company is listed by the Government of India.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.