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LIC IPO Day 1 updates: Employee, policyholder segments fully subscribed

LIC IPO: The life insurer has been providing life insurance in India for over 65 years and is the country's biggest life insurerPremium
LIC IPO: The life insurer has been providing life insurance in India for over 65 years and is the country's biggest life insurer

  • LIC IPO: The insurance behemoth has garnered over 5,500 crore from anchor investors

LIC IPO: Life Insurance Corporation has set a price band of 902 to 949 per equity share for the public offer, which closes on May 9. Though trimmed, LIC IPO will be the biggest public offer to date in the country. The government is offloading 3.5% or 22.13 crore shares and targets to raise 20,550 crore through this public issue. The government had decided to reduce the size of the IPO due to the volatility in the market. LIC policy holders will get a discount of will get a discount of 60 per equity share. Retail and employees will get a discount of 40.  LIC IPO is set to see a strong demand, given attractive pricing, says analysts. According to market observers, LIC is trading a healthy premium or GMP.

04 May 2022, 04:34:21 PM IST

LIC IPO - Employee portion fully subscribed

As of 4:30 pm on Day 1 of LIC IPO, the issues was 0.6% subscribed. Here are the subscription status of different segments:
Qualified Institutional Buyers (QIBs)  - 0.33
Non Institutional Investors - 0.25
Retail Individual Investors (RIIs) - 0.54
Employee Reserved - 0.99
Policyholder Reserved - 1.80

04 May 2022, 04:30:12 PM IST

Subscribe to LIC IPO despite some headwinds: Geojit

“At the upper price band of Rs.949, LIC is available at P/EVPS (Embedded Value Per Share) of 1.1x which is at a discount of 65% compared to the average valuation of private life insurance players. Even though headwinds like declining market share, lower short-term persistency ratios and sub-par margins demand a discount to private players, the current valuation is attractive considering its strong market presence, improvement in profitability due to changes in surplus distribution norms and strong sector growth outlook. Hence, we assign a “Subscribe" rating on a short to medium term basis," Geojit said in a note. 

04 May 2022, 03:57:17 PM IST

LIC reaches out to its policyholders via SMS

"LIC filed red herring prospectus(RHP) dt 26.4.22 with SEBI/Stock Exchanges for its IPO reserving shares for eligible policyholders. For details & risks in investing in LIC IPO and disclaimers, see RHP and links....," said the SMS sent by the insurer to the policyholders on their registered mobile numbers.  LIC has fixed the price band at 902-949 per equity share for the issue. The offer includes a reservation for eligible employees and policyholders. The retail investors and eligible employees will also get a discount of 45 per equity share and policyholders will get a discount of 60 per share.

04 May 2022, 03:11:50 PM IST

LIC IPO subscription details

As of 3:30 pm, the issue was subscribed 0.50 times. Here the subscription details of different segments:

QIP - 0.03

Non Institutional Investors - 0.22

Retail Investors - 0.52

Employee - 0.89

Policyholder Reserved - 1.68 times

04 May 2022, 02:58:11 PM IST

RBI hike soured market sentiment on Day 1 of LIC IPO: Analyst

"The MPC's decision, in an unscheduled meeting, to raise the repo rate by 40bp and CRR by 50 bp is a surprise since it came on the LIC IPO opening date. MPC's proactive move is justified from the perspective of inflation management, but the timing leaves a lot to be desired. The above 1000 point crash in Sensex has soured the sentiments on the opening day of India's largest IPO. The 10-year bond yield has spiked to above 7.39% indicating an imminent rise in the cost of funds," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

04 May 2022, 02:55:31 PM IST

Best advt for LIC is today’s market: Samir Arora

The RBI monetary policy committee in a off-cycle meet raised its repurchase rate by 40 basis points to 4.40%, It also raised the cash reserve ratio by 50 basis points. This led a a big slump in stock markets. “Best advt for LIC is today’s market: Anything can happen in life. Never forget about insurance," fund manger Samir Arora tweeted. 

04 May 2022, 02:28:51 PM IST

LIC IPO subscription details

As of 2:21 pm, the issue was 0.44 times subscribed. Here the subscription details of different segments: 

QIP - 0.03

Non Institutional Investors - 0.10

Retail Investors - 0.47

Employee - 0.77

Policyholder Reserved - 1.5 times

04 May 2022, 01:55:56 PM IST

How LIC share allotment will be done

Avinash Gorakshkar, Head of Research at Profitmart Securities said, "In retail category, share allotment will be done on the basis of draw of lots that means allottees will get lots through allotment or a minimum of 15 LIC shares if their application gets through the lucky draw. However, in the case of policyholders and employees category, all applicants will be given at least some share(s) on the proportionate basis that means here share allotment won't be done on the basis of lots. So, one should apply as much of lots as one can if it falls under the category of LIC policyholder and employees category. by doing this, they will be able to enhance their chances of getting more LIC shares."

04 May 2022, 01:17:01 PM IST

LIC IPO one-third subscribed in first three hours

As 1:10 pm, LIC  IPO was 0.35 times subscribed. The policyholder segment 1.23 times, employee 0.63 times, retail  0.38 times and non-institutional 0.08 times. 

04 May 2022, 12:41:26 PM IST

LIC IPO:  Possibility of downside in shares looks limited, says Samco

“From a valuation standpoint, at the upper band of the issue price, LIC is priced at 1.1x embedded value, which is at a significant discount to peers. Given the attractive valuation, the downside from here seems limited. Further the fact that a discount has also been offered to retail investors is the cherry on the cake. Taking into account all these factors, we have a SUBSCRIBE rating on this IPO," says Yesha Shah, Head of Equity Research, Samco Securities.

04 May 2022, 12:18:05 PM IST

LIC IPO - GMP update

According to market observers, the GMP of LIC shares in grey market is around 60- 65. 

04 May 2022, 12:07:47 PM IST

LIC IPO - Subscription details

As of 12 noon, LIC IPO was 0.28 times subscribed while retail segment 0.31 times. The policyholder segment was nearly fully subscribed at 0.96 times and employee segment at 0.47 times. 

04 May 2022, 12:06:38 PM IST

LIC IPO - Axis Securities sees potential of listing gains

In a note Axis Securities said: “Given the under-penetration of life insurance in India, the higher protection gap, and the improving financialization of savings, we expect LIC to maintain its market leadership position adequately supported by good business traction. Furthermore, LIC intends to increase its share of high-margin non-par products to improve its margins which will augur well for the company over the long term. Additionally, the company's NBP/APE growth has witnessed a strong rebound, enabling it to gain market share in Q4FY22. We believe LIC would trade at attractive valuations as at the upper end of the price band, the stock would trade at 1.1x market Cap/EV (H1FY22 embedded value) vs. the industry average of 3x."

04 May 2022, 11:20:23 AM IST

What makes LIC stand out from other life insurers?

In a note Axis Securities said: “The life insurance industry is capital intensive with a long gestation period, which has resulted in only a few players being active in the industry across most markets and the larger players within each market having a significant market share. However, nowhere in the world is the difference in market share between the largest and the second-largest life insurer as stark as in India, with the second-largest player having only 8.0% market share of GWP compared to LIC’s market share of 64.1% by GWP for FY21. LIC’s market share in India is unparalleled globally with no other life insurance player in any other country enjoying such a large market share."

04 May 2022, 11:01:35 AM IST

LIC IPO subscription off to brisk start

In the first hour of opening, the LIC issue was subscribed 0.12 times, with retail segment 0.18 times, as of 11 am.  The anchor book segment had seen a strong demand from institutional investors. India’s largest ever public offering drew anchor investors including Norway’s sovereign wealth fund and the Singaporean government, raising 5630 crore ahead of its full initial public offering. The 123 anchor investors joining Life Insurance Corp. of India’s IPO committed to purchase shares at 949.

04 May 2022, 10:47:02 AM IST

LIC IPO to stay open on Saturday for retail investors

The LIC IPO, which kicked off today, will remain open until May 9, including on Saturday, a notification on the National Stock Exchange of India Ltd. The Indian government is selling 221.4 million LIC shares at between 902 and 949 each, which would raise as much as 21000 crore at the top end of the range.

04 May 2022, 10:39:34 AM IST

LIC IPO related inflows could support rupee

“All focus will be on India's biggest IPO- LIC which opens today for the public. The anchor book worth Rs. 5,627 crore got an overwhelming response but the grey market suggests just an 8-10% premium. There could be a steady inflow on account of the same and could be a point for Rupee’s appreciation," CR Forex Advisors said in a note.

04 May 2022, 10:19:48 AM IST

LIC IPO - First subscription details in

LIC IPO was 0.02 times subscribed as of 10:15 am. The retail segment was subscribed 0.04 times. In the LIC IPO, 35% of shares or 6.918 crore shares are reserved for retail investors while 50% for QIB portion and 15% for non institutional investors. 

04 May 2022, 10:12:15 AM IST

Sensex struggles as LIC IPO opens for subscription

State-run insurer Life Insurance Corporation's initial public offering opened for bids today. The Sensex was down about 140 points ahead of the US Fed decision. “The Fed decision expected late tonight will be crucial in determining the trend of the markets globally. Markets already know and has discounted 50 bp rate hike and $ 95 billion worth balance sheet reduction. Therefore, market trend after the Fed announcement will be influenced by the Fed's guidance on inflation, future rate hikes and further balance sheet reduction," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

 

04 May 2022, 10:10:13 AM IST

LIC IPO set to see strong demand

Analysts say that LIC IPO is very attractively priced and could see a strong demand. Despite the trimmed size of the IPO, LIC’s issue will be the biggest primary offering in domestic equity market. Despite opening up of the insurance market in 2000-01 to the private players, still today LIC commands a dominant position in the domestic market.  At the higher price band, LIC is demanding a P/EV multiple of 1.1x, which is at significant discount to the multiples of private players (ranging from 2.5-4.2x). Thus considering the above observations, we assign a 'SUBSCRIBE rating for the issue," Choice Broking said in a report.

04 May 2022, 09:39:31 AM IST

‘LIC IPO is just a steal’: Deepak Shenoy

In a tweet, Deepak Shenoy, CEO of CapitalMind, said: “We've changed our mind. This LIC IPO is just a steal at a 600,000 crore market cap. They should make about 50,000 cr. in profits in FY2023!" Even after the reduced size of about 20,557 crore, LIC IPO is going to be the biggest initial public offering ever in the country. So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at 18,300 crore, followed by Coal India (2010) at nearly 15,500 crore and Reliance Power (2008) at 11,700 crore.

04 May 2022, 09:02:26 AM IST

LIC IPO listing, allocation dates

LIC IPO is set to get listed on BSE and NSE on 17th May. According to brokerages, finalization of basis of allotment is likely to be on 12th May 2022, unblocking of ASBA account 13th May, and credit to demat accounts on 16th May 2022.

04 May 2022, 08:37:43 AM IST

LIC IPO - Latest GMP ahead of opening of issue

According to market observers, LIC shares are quoting at a GMP of 85 per share as the issue is set to open for subscription later today. India: LIC is the largest asset manager in India as at December 31, 2021, with AUM (comprising policyholders’ investment, shareholders’ investment and assets held to cover linked liabilities) of 40 trillion on a standalone basis.

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