INSUBCONTINENT EXCLUSIVE:
LIC has over 64% share of total insurance premiums in India.By now, everyone has heard about the upcoming LIC IPO.Life Insurance Corporation
(LIC) has over 64% share of total insurance premiums in India, in financial year 2021, as per Statista
This is much higher than the share of premiums held by private life insurers.LIC's assets under management (AUM) was Rs 38 tn as of
September 2021, compared to Rs 37 tn in March 2021
This is almost 3x the AUM of all the private life insurers in India and over 15x more than the AUM of the second largest life insurer, SBI
Life Insurance Company.All these facts alone make the IPO very enticing apart from its potential size.The state-owned behemoth is expecting
at least one seventh of India's investing population (around 7.5-10 m retail investors), including its policy holders, to participate in
public offer (IPO).So the big question is...will you apply for the IPO or wait on the sidelines?To understanding what our readers are
thinking, we ran a poll on Equitymaster's Telegram Channel over the weekend.Here's what we asked our readers...Given what you know and
Its assets exceed the GDP of several economies
Given its dominance you might have expected a majority it to be in favor of applying.But the fact that people are considering staying away
from LIC's IPO shows that there's some rationality left out there after all!35% of the entire IPO is reserved for retail investors, so
that's a huge task for the government
To make sure things go as planned, brokers, bankers, and LIC agents are driving efforts to ensure maximum retail participation.37% people
said they will participate in the IPO.LIC's IPO is termed as India's Aramco moment, so it would require huge commitment from retail
investors.Prior to this, Paytm, Coal India, and Reliance Power were the three biggest IPOs in India.Paytm's IPO managed to book its retail
Coal India saw just over 2 times subscription from retail investors.Meanwhile, Reliance Power received a massive 14.9 times subscription
This IPO was launched at a time similar to today
Demat account openings were at a high and people poured their money to invest in the IPO.Due to the efforts that LIC agents, we know there's
a lot of anticipation for the LIC IPO.The lowest percentage, 15%, said they're not sure what to make of the situation.They are sitting on
They're observing how the market situation unfolds amid the Russia-Ukraine tensions
But the enthusiasm is strong due to many initiatives taken by government.The IPO is crucial for the markets as it will help the government
narrow its fiscal deficit.Due to its massive size, a few companies are deferring their plans to launch their IPOs
They don't want to clash with LIC's mammoth issue
Rough calculations suggest that around US$10 bn will be sucked out of the system once the IPO is launched.It remains to be seen how the IPO
sails through once its price band, valuation and other key details are announced.No matter what happens, LIC's IPO will be the defining
It will be a test of retail investors' appetite.Happy Investing!Disclaimer: This article is for information purposes only
been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)
