LIC IPO subscribed 2.95x overall on the last day; garners demand of over Rs45,000 crore

9 May 2022 , 08:02 PM

Life Insurance Corporation of India’s initial public offering was subscribed 2.95 times on its final day of bidding. The issue opened for subscription on Wednesday, May 4, 2022 saw a strong responses from all investor categories, particularly its policyholders who have single handedly subscribed to 60% of its Issue size, followed by the retail investors and other investor categories

The portion reserved for eligible policy holders was subscribed 6.12 times, reservation for eligible employees was subscribed 4.40 times, Retail Category was subscribed 1.99 times; the non-institutional category witnessed subscription of 2.91 times and qualified institutional buyers category saw subscription of 2.83 times

The offer received bids for 47,83,67,010 shares against the offered 16,20,78,067 equity shares (excluding shares offered to anchor investors), as per the 7:00 pm data available on the bourses. The IPO is through an offer-for-sale (“OFS”) of up to 221,374,920 Equity Shares of Face Value of Rs 10 each.

India’s largest life insurer, LIC had a market share of 61.6% in terms of premiums or GWP, 61.4% in terms of New Business Premium (or NBP), 71.8% in terms of number of individual policies issued, and 88.8% in terms of number of group policies issued, for the nine months ended December 31, 2021

Kotak Mahindra Capital Company Limited, Axis Capital Limited, BofA Securities India Limited, Citigroup Global Markets India Private Limited, JM Financial Limited, J.P. Morgan India Private Limited, Goldman Sachs (India) Securities Private Limited, ICICI Securities Limited, Nomura Financial Advisory and Securities (India) Private Limited and SBI Capital Markets Limited are the book running lead managers to the issue.

LIC was formed by merging and nationalizing 245 private life insurance companies in India on September 1, 1956, with an initial capital of Rs50.00 million. LIC is the fifth largest life insurer globally by GWP (comparing LIC’s life insurance premium for Fiscal 2021 to its global peers’ life insurance premium for 2020) (source: the CRISIL Report) and the largest asset manager in the country as at December 31, 2021 (source: the CRISIL Report), with an established track record of financial performance and profitable growth. As at December 31, 2021, the Corporation covered 91% of all districts in India and had the largest individual agency network among life insurance entities in India, comprising approximately 1.33 million individual agents.

LIC’s individual product portfolio in India comprises 32 individual products (16 participating products and 16 non-participating products) and seven individual optional rider benefits. LIC’s group product portfolio in India comprises 11 group products. LIC’s omni-channel distribution platform for individual products currently comprises (i) individual agents, (ii) bancassurance partners, (iii) alternate channels (corporate agents, brokers and insurance marketing firms), (iv) digital sales (through a portal on our Corporation’s website), (v) Micro Insurance agents and (vi) Point of Sales Persons — Life Insurance.