LIC is the solely owned insurance company in the country and also one of the most reliable insurance which people rely on.
What is the size of the LIC IPO?
1) With 286 million policies, 115,000 staff, 1.34 million individual agents, and over 2000 branches, LIC is India’s most comprehensive life insurance.
2) It manages $528 billion in assets, which is more significant than India’s whole mutual fund sector and 3.3 times the total assets under management (AUM) of all private life insurance companies combined.
3) The embedded value of LIC is estimated to be $71.3 billion in the draught prospectus. The embedded value is a critical financial metric for life insurance firms since it gauges future cash flows.
4) If LIC is valued at four times its underlying value, it may have a market capitalization of $285 billion, making it India’s most valuable corporation. At that price, a 5% ownership in the company would be worth $14.25 billion to the government.
Why should one invest in the LIC initial public offering (IPO)?
1) The Life Insurance Corporation of India (LIC) controls more than 70% of the Indian insurance market.
2) LIC is the only PSU that has maintained its position as India’s top insurer despite stiff competition from private insurers.
3) In 2021, LIC’s net profit increased to Rs.1437 crore.
4) The upcoming IPO provides a profitable investment opportunity for long-term growth potential.
5) LIC employees and individual investors may benefit from investing in the IPO for long-term profit and everyday earnings.
Hacks for Increasing Your LIC IPO Allotment Chances:
Hack 1: Don’t make giant bids:
According to SEBI’s allotment process, all retail applications (under Rs 200,000) are treated equally, which means that you have the same chance of acquiring a LIC IPO Allotment whether you take one offer or several bids. In an oversubscription, it is pointless to submit an extensive application. It will make it easier to invest extra cash in other IPOs.
Hack 2: Using several accounts to apply:
LIC IPO allotment can be increased by applying through several versions. We learned from the first hack that applying for maximum bids with a single account is futile; instead, we can apply for the LIC IPO using numerous reports. You can also apply for a Demat account using the accounts of your family and friends.
Hack 3: Never Submit a Bid Below the Cut-Off Price
To estimate the fair price, companies frequently use a book-building method. They set a price range, and investors must bid within it. The price at the top of the upper band of the content is the cut-off price, and the investor is willing to pay whatever price the company decides at the end of the book-building process. If an IPO’s price range is 100 to 120, the cut-off price is 120.
It would be best to bid at the cut-off price to maximize your chances of receiving a LIC IPO allotment. If the LIC IPO is oversubscribed, it signifies that everyone has placed a bid at the cut-off price. As a result, if you offer a lesser price, your prospects of receiving a LIC IPO allotment are nil.
Hack 4: Don’t sign up at the last minute:
If you have already decided to apply for the LIC IPO, you should do so first or second day.
Hack 5: Carefully fill out the documents:
Filling up the LIC IPO forms should not be rushed. The money, name, DP id, bank details, and other details should be filled incorrectly by the investor. There are also printed forms available to go along with it. ASBA is the safest and most convenient option to apply for the LIC IPO. One can apply for ASBA through their bank, but the investor should double-check the data before doing so. It will almost certainly prevent technical difficulties.
Hack 6: Benefit for LIC Policyholders
The LIC has set aside 3.16 crore shares for its 26 million policyholders in share market open time. However, only those with a PAN linked to their policies and Demat accounts can invest. As a result, if you own a LIC policy, your chances of receiving a LIC IPO allotment are better.
Hack 7: LIC Employee Benefits:
Employees of LIC have a specific quota of 1.58 crore shares, and they are also allowed to apply in the retail category, subject to meeting additional restrictions. If you are a LIC employee, you have a better chance of securing a LIC IPO allotment.