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About Company-
LIC is the largest insurance provider company in India. It has a market share of above 66.2% in new business premium. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.
As of 30 Sep 2021, it has a total AUM of Rs. 39 lakh crore. LIC operates through 2048 branches, 113 divisional offices, and 1,554 Satellite Offices. It operates globally in Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait, and the United Kingdom.
LIC is the largest asset manager in India as at September 30, 2021, with Assets Under Management (AUM) (comprising policyholders’ investment, shareholders’ investment and assets held to cover linked liabilities) of Rs. 39,558,929.24 million on a standalone basis.
The corporation has the largest individual agent network among life insurance entities in India, comprising approximately 1.35 million individual agents as at March 31, 2021, which was 7.2 times the number of individual agents of the second largest life insurer (Source: the CRISIL Report).
In addition to LIC’s life insurance operations in India, it has one branch in each of Fiji, Mauritius and the United Kingdom and subsidiaries in Bahrain (with operations in Qatar, Kuwait, Oman and the United Arab Emirates), Bangladesh, Nepal, Singapore and Sri Lanka in the life insurance industry.
The corporation also has other subsidiaries which include LIC Pension Fund Limited, which is one of the three companies appointed as a pension fund sponsor under the Indian Government’s New Pension System, and LIC Cards Services Limited, which operates a credit card business.
Company Promoters:
The President of India, acting through the Ministry of Finance, Government of India is the company promoter.
Company Financials:
| Summary of financial Information (Restated Consolidated) | |||||
| Particulars | For the year/period ended (₹ in Millions) | ||||
| 30-Sep-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | ||
| Total Assets | 40,434,596.70 | 37,464,044.68 | 34,141,745.74 | 33,663,346.17 | |
| Total Revenue | 15,197.24 | 29,855.71 | 27,309.56 | 26,449.96 | |
| Profit After Tax | 15,040.13 | 29,741.39 | 27,104.78 | 26,273.78 |
Objects of the Issue:
The IPO aims to utilize the net proceeds towards the following purposes;
- To achieve the benefits of listing the equity shares on the stock exchange.
- To carry out an offer for sale of 316,249,885 shares by selling shareholders.
LIC IPO Details
| IPO Opening Date | May 4, 2022 |
| IPO Closing Date | May 9, 2022 |
| Issue Type | Book Built Issue IPO |
| Face Value | ₹10 per equity share |
| IPO Price | ₹902 to ₹949 per equity share |
| Market Lot | |
| Min Order Quantity | |
| Listing At | BSE, NSE |
LIC IPO Effective Price by Category
| Investor Category | Effective Price |
| QIBs | Rs 949 |
| HNIs | Rs 949 |
| Retail | Rs 904 (Rs 45 discount) |
| Policyholders | Rs 889 (Rs 60 discount) |
Competitive Strength:
Brand Name
LIC is one of the oldest and strongest companies in India in terms of brand awareness. The company has won multiple prestigious awards domestically and internationally for their brand image, campaigns and corporate excellence. LIC has also emerged as the third strongest and the tenth most valuable insurance brand globally.
Wide Product Portfolio
LIC has a wide variety of product offerings of life insurance plans, endowment plans, whole life plans, moneyback plans, term insurance plans and insurance riders, each having multiple schemes and plans within for catering the various age groups and types of investments for the customers.
Inorganic Growth
LIC has invested in multiple companies and government bodies which entails them to grow inorganically along with providing the companies with capital support. LIC also has 2 subsidiaries and 4 associate companies which look after the pension fund, housing finance, banking, mutual funds and cards
Wide Network of Agents
It has the strongest network of agents in the country. As of March 31, 2021, LIC has 13.53 lakh individual agents scattered across the country and covering rural and urban customers.
AUM And Market Share
LIC has the highest market share of around 61% in New Business Premiums and 71% in Number of policies. In FY21 LIC’s AUM doubled to ₹36.7 trillion on a stand-alone basis.
Weakness:
· Government Restrictions:
Government often intervenes in the business where maximum growth and income is involved, this might affect the decision making and utilisation of its resources. In the past, the company has invested in many loss-making companies due to the policies laid down by the government.
· Advertising:
While comparing with the private players the LIC do not spend heavily on the advertising and this shows in the quality of ads and content they create.
· Technology Advancement:
The company is one of the largest employers in the country. Due to the responsibility towards giving the employment the company restricts themselves from investing into technology where lesser human intervention is required.
· Competitive Industry:
The industry in which LIC operates is highly competitive in terms of gaining the market share. Even though LIC has the highest market share, the private counter parts come up with strategy and plans to cater the customers of LIC in terms of better service and ease.
· Operationally Inefficient:
The company lacks in giving proper service to their customers due to their traditional way of doing business.
Opportunities:
· Expansion In Product Portfolio:
The company has the ability to expand its product portfolio and cater to the customers by introducing furthermore products depending on the future needs.
· Expansion of Foot Prints:
The company should look forward to expand its foot prints into new geographies with new products.
· Marketing Initiatives:
The company should focus on spending heavily on the advertising and marketing initiatives in order to increase new product offerings and catering to the new age customers.
· Technology Advancement:
The Insurance sector is the one sector where the technology has played a big role in the past. Advance technologies such as blockchain and artificial intelligence can help the company in various ways and improve the business of the company on a greater scale.
· Marketing Initiatives:
The company has a high disposable income which can be used to acquire companies and invest into the new age businesses from which the company can benefit in terms of technology advancement as well make higher returns for them.
Threats:
· Government Policies:
LIC has to abide by the rules and regulations laid down by the government. This puts limitations on the growth of the company.
· Mis Selling Can Affect Persistency:
LIC do not have a complete hold on their agents through which they sell maximum number of policies. In order to gain the personal interest, the agents mis sell the customers with policies which are not required by them due to which LIC losses the customer’s trust.
· Lack of Flexibility:
LIC do not have a liberty to garner new technologies and means of distribution. The company continues to follow traditional methods and restricts its chance to cater to the young urban population.
Company Contact Information
Life Insurance Corporation of India (LIC)
Yogakshema, Jeevan Bima Marg
Nariman Point, Mumbai 400 021,
Phone: +91 22 6659 8732
Email: Investors@licindia.com
Website: http://www.licindia.in/
LIC IPO Registrar
KFin Technologies Limited
Phone: 04067162222, 04079611000
Email: lic.ipo@kfintech.com
Website: https://karisma.kfintech.com/
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LIC IPO Lead Manager(s)
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Lead Manager Reports