Life Insurance Corporation of India (LIC) IPO

Life Insurance Corporation of India (LIC)

Rs.14,235 / 15 shares
Minimum Investment

LIC IPO Details

IPO date:
4th May to 9th May, 2022

Issue size:
Rs. 20557.23 crores

Listing at:
BSE & NSE

Retail quota:
35%

IPO price:
Rs 902 - Rs 949 per equity share

Minimum lot size:
15 equity shares and in multiples of 15 thereafter

Open Free Demat Account & Apply for Life Insurance Corporation of India (LIC)

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LIC IPO Offer Details

+The IPO is 100% Offer for Sale (OFS) by the selling shareholder (President of India, acting through the Ministry of Finance, Government of India). The selling shareholder, through its letter dated April 26, 2022 conveyed its approval for the offer for sale of up to 221,374,920 Equity Shares. The face value of the Equity Shares is Rs 10 each. The Employee Reservation Portion shall not exceed 5% of the post-Offer Equity Share capital. The Policyholder Reservation Portion shall not exceed 10% of the Offer size. The company may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion is to be reserved for domestic mutual funds, subject to valid bids being received from domestic mutual funds at or above the anchor investor allocation price.

Life Insurance Corporation of India Company Background

Life Insurance Corporation of India (LIC) has been providing life insurance in India for more than 65 years.

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It is the largest life insurer in India with a 61.6% market share in terms of premiums (or GWP), a 61.4% market share in terms of New Business Premium (NBP), a a 71.8% market share in terms of number of individual policies issued, a 88% market share in terms of number of group policies issued for the nine months ended December 31, 2021.

The corporation had the highest gap in market share by life insurance Gross Written Premium (GWP) relative to the second-largest life insurer in India as compared to the market leaders in the top seven markets globally (in 2020 for the other players and in Fiscal 2021 for its Corporation) (Source: the CRISIL Report). LIC ranks fifth globally by life insurance GWP (comparing its life insurance premium for Fiscal 2021 to its global peers’ life insurance premium for 2020) and 10th globally in terms of total assets (comparing its assets as at March 31, 2021 with other life insurers’ assets as at December 31, 2020) (Source: the CRISIL Report).

LIC is the largest asset manager in India as at December 31, 2021, with Assets Under Management (AUM) (comprising policyholders’ investment, shareholders’ investment and assets held to cover linked liabilities) of Rs 40.1 trillion on a standalone basis.

LIC’s individual products comprise (i) participating insurance products and (ii) non-participating products, which include (a) savings insurance products; (b) term insurance products; (c) health insurance products; (d) annuity and pension products; and (e) unit linked insurance products.

Its individual products include specially designed products for specific segments, such as special products for women and children and Micro Insurance products.

In addition, the corporation offers riders that provide additional benefits along with the base product to cover for additional risks, such as accidental disability, death, critical illness and premium waiver on the death of the proposer.

Its 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 its website), (v) Micro Insurance agents and (vi) Point of Sales Persons-Life Insurance scheme.

The company has the largest individual agent network among life insurance entities in India, comprising approximately 1.33 million individual agents as at December 31, 2021, which was 6.8 times the number of individual agents of the second largest life insurer (Source: the CRISIL Report).

Let us now look at a few competitive strengths and strategies of Life Insurance Corporation of India…

Competitive Strengths

+ Fifth Largest Life Insurer Globally by GWP and the Largest Player in the Fast Growing and Underpenetrated Indian Life Insurance Sector: Life Insurance Corporation of India (LIC) ranks fifth globally in terms of life insurance GWP (comparing its life insurance premium for Fiscal 2021 to its global peers’ life insurance premium for 2020), and 10th globally in terms of total assets (comparing its assets as at March 31, 2021 with assets of other life insurers as at December 31, 2020) (Source: the CRISIL Report). It is the largest life insurer in India in terms of GWP, NBP, number of individual policies issued and number of group policies issued for Fiscal 2021 (Source: the CRISIL Report). For Fiscal 2021, LIC issued approximately 21 million individual policies in India, representing approximately 75% market share in new individual policy issuances (Source: the CRISIL Report). The second largest player in the industry issued 1.66 million individual policies and had a 5.9% market share for Fiscal 2021 (Source: the CRISIL Report). For Fiscal 2021, its market share in the Indian life insurance industry was 66.2% based on NBP, and its NBP was 1.96 times the total private life insurance sector and 8.9 times the NBP for the second-largest player in the Indian life insurance industry. (Source: the CRISIL Report).

+ Trusted Brand and a Customer-Centric Business Model: Life Insurance Corporation of India was incorporated in 1956 and up to 2000 it was the only life insurance provider in India, which made LIC, as a brand, synonymous with life insurance in India (Source: the CRISIL Report). The brand ‘LIC’ was recognised as the third strongest and 10th most valuable global insurance brand in 2021, as per the “Insurance 100 2021” report released by Brand Finance. As per the report, the brand value of LIC in 2021 was US$ 8,655 million, with a Brand Strength Index (BSI) score of 84.1 out of 100, corresponding to AAA- brand strength rating. The brand ‘LIC’ was also recognised by WPP Kantar as the second most valuable brand in the report “BrandZ™ Top 75 Most Valuable Indian Brands” for 2018, 2019 and 2020. It has won the Reader’s Digest Trusted Brand Award numerous times and the prestigious Outlook Money Award Gold Award in Editor’s Choice Category as the “Most Trusted Brand in Insurance” twice. The corporation believes that its strong brand name and early-mover advantage is the key driver in maintaining its leading position in the Indian life insurance industry.

+ Cross-Cyclical Product Mix that Caters to Diverse Consumer Needs and an Individual Product Portfolio that is Dominated by Participating Life Insurance Policies: LIC's policies address consumers’ needs through the four principal stages of life, namely, beginning of savings, career and marriage, family needs and retirement planning and retirement and asset drawdown. LIC has a broad, diversified product portfolio covering various segments across individual products and group products. As at December, 2021, its individual product portfolio in India comprised 32 individual products (16 participating products and 16 non-participating products) and seven individual optional rider benefits. As at December 31, 2021, LIC's group product portfolio in India comprised 11 group products. The corporation is well placed to serve customers across age brackets with a comprehensive product portfolio, while maintaining a strong connect across age groups.Customers in the age bracket 27 to 40 years old accounted for approximately 42% and 42% of individual policies sold in Fiscal 2021 and the nine months ended December 31, 2021, respectively.In annuity products, it had a market share in India of 84.7%, 76.9%, and 68.7% in terms of GWP for Fiscal 2020, Fiscal 2021 and December 31, 2021, respectively (Source: the CRISIL Report).

+ Presence Across India Through an Omni-Channel Distribution Network with an Unparalleled Agency Force: 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 its website), (v) Micro Insurance agents and (vi) Point of Sales Persons-Life Insurance scheme. As at December 31, 2021, LIC had the following distribution network for individual products in India:

  • 1.33 million individual agents
  • 70 bancassurance partners
  • 215 alternate channel
  • A portal on its website for digital sales
  • 2,128 active Micro Insurance agents
  • 4,769 Point of Sales Persons-Life Insurance scheme
Its individual policies are primarily distributed by the corporation’s individual agents. LIC has a wide presence across India and distribute its policies in all 36 states and union territories. As at March 31, 2021, the corporation had offices in 91% of districts in India as compared to 81% for the entire private sector combined (Source: IRDAI Annual Report 2020-2021).

+ Harnessing Technology Capabilities to Support Customer Connect and Drive Operating Efficiencies: LIC has developed technological capabilities that helps them provide a great customer experience and drive operating efficiencies. As at December 31, 2021, LIC’s portal had 18.60 million registered users and its mobile app for policyholders, available on both Android and iOS platforms, had 5.13 million registered users. Given its focus on and investments in information technology, the corporation believes that it is well-positioned to capitalise on the increasing digitisation of the Indian economy. LIC has two apps for intermediaries to use at the pre-purchase stage:

  1. Sales App – This application provides intermediaries lead management, financial need analysis, quotes and illustrations, e-proposal and content management.
  2. LIC Quick Quotes App – This application provides intermediaries with premium quotation and benefit illustration, with a facility to compare quotes and view variations.

+ Largest Asset Manager in India with an Established Track Record of Financial Performance and Profitable Growth: 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 Rs 40.1 trillion on a standalone basis, which was (i) more than 3.2 times the total AUM of all private life insurers in India, (ii) approximately 15.6 times more than the AUM of the second-largest player in the Indian life insurance industry in terms of AUM, (iii) more than 1.1 times the entire Indian mutual fund industry’s AUM and (iv) 17% of India’s annualised GDP for Fiscal 2022 (Source: CRISIL Report).
As per the CRISIL Report, as at December 31, 2021, LIC's investments in listed equity represented around 4% of the total market capitalisation of NSE as at that date (Source: the CRISIL Report). Its policyholders’ funds have a well-diversified investment portfolio. As at December 31, 2021, on a standalone basis, its policyholders’ investment portfolio included 38.09% central government securities, 24.56% equity securities, 24.25% state government securities and 8.35 corporate bonds.

Key Strategies

Here are a few strategies Life Insurance Corporation of India has for its business:

Capitalize on the growth opportunities in the Indian life insurance sector
Further diversify its product mix by increasing the contribution of the non-participating portfolio
Reinforce its omni-channel distribution network and increase its productivity
Continue leveraging technology to aid growth, drive operating efficiencies and provide digital support
Maximize value creation through various commercial and financial levers as well as changes to its Corporation’s surplus distribution policy

Life Insurance Corporation of India Consolidated Financials

And finally here’s a look at key financials of Life Insurance Corporation of India…

Revenue from operations

Particulars (in Rs. million)

Particulars (in Rs. million)

How to apply for an IPO?

Here's a video playlist to help you invest in the upcoming Life Insurance Corporation of India IPO

How to apply for IPO through ASBA

How to apply for an IPO using UPI

Top Life Insurance Corporation of India IPO FAQs

You can apply for LIC IPO online by using the Kotak Securities platform, UPI, and ASBA.

The Life Insurance Corporation of India IPO has an issue size of Rs. 20,557.23 crore. The IPO opens for subscription on 4th May, 2022, and ends on 9th May, 2022.

The allotment dates are on or around 12th May, 2022.

The dates are yet to be decided.

Yes. According to the SEBI ICDR Regulations, no equity share can be issued in physical form by any entity, and all equity shares must be issued in dematerialized form. As a result, anybody, whether policyholders or retail investors, must have a demat account in order to participate in the Offer.

The IPO opens for subscription on 4th May to 9th May, 2022

Following the approval of a UPI mandate request, the funds required for an initial public offering will be blocked. Nonetheless, these money will be released only if your UPI mandate expires or if you do not receive an allotment.
However, if the funds are still not released following these two developments, contact your bank to resolve the situation.

There is no way to assure allotment for the LIC IPO or any other public offering for which you have opted to apply.

No, you do not need to shell out anything extra to apply for any public issue using the Kotak Securities platform.

Here are some possible reasons for the rejection of your LIC IPO application:
• When approving your UPI mandate, you provide an invalid UPI PIN.
• Failure to verify that your UPI ID, Demat account, and bank account are all linked to the same PAN number.

The cut-off price is the price at which the shares of LIC or any other company are issued to the investors, which could be any price within the IPO price band.
This is a fixed price that is determined during the allocation stage of a public offering.
Yes, at this price range, you can apply for an IPO.

Yes, you can amend your bid for the LIC IPO after the final application has been approved. You can change the lot size and the UPI ID here. However, any changes you make after granting the UPI mandate request will be considered a new bid. In such cases, the banks will block money again, in addition to your previous application. Simultaneously, you will receive a new UPI mandate request for this most recent offer, just as you did before.

No, you cannot submit more than one application for this LIC IPO or any other public issue using the same PAN.

15 equity shares and in multiples of 15 thereafter

Yet to be announced

The LIC shares will be credited to the Demat account after allotment.

The government has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India. Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd.

The minimum order quantity for LIC is 15 equity shares.

KFin Technologies Private Limited is the registrar for this IPO.

Retail individuals, NIBs, and QIBs are expected to participate in this IPO.

To apply for an IPO:
● Login to your Kotak Securities Trading platform
● Select the IPO you wish to apply for
● Enter the price and the number of lots you wish to buy
● Enter your UPI ID, and once you click on 'Submit' or 'Proceed' button, your bid is placed with the exchange
● Upon receiving block funds request on your UPI app, approve the request
● Upon successful approval, the required amount is blocked in your bank account
● Upon allotment, the blocked amount is deducted from your bank account, and the shares are credited into your Demat account

To know more about the LIC IPO, you can check below links:
Life Insurance Corporation of India IPO Details
LIC IPO Details You Must Know

The LIC IPO status is currently unavailable since the public offer has not yet been launched. You can check IPO allotment status on NSE, BSE and registrar to the issue websites once it is announced.

Yes, policyholders have been allocated up to 10% of the LIC IPO issue size. However, your PAN must be linked to the LIC policy before February 28, 2022.

You can read more about Life Insurance Corporation of India and its IPO from the company’s red herring prospectus (RHP) here.