Upcoming LIC IPO 2022: History, AUM, Revenue, Profit, & More!

There are brands in the world that have become synonymous with a product or category. Photocopies became Xerox, sticky notes with Post-Its, search engines became Google, and more. 

Similarly, life insurance in India is inseparable from the Life Insurance Corporation of India (LIC). The government-backed entity was created over 60 years ago by combining 245 insurers and provident societies. 

You must’ve seen more and more of LIC in the news over the past few months. The buzz surrounding LIC is due to its upcoming IPO that might become India’s biggest ever! 

All About Life Insurance Corporation Of India (LIC)

India’s insurance industry goes back to pre-Independence when Oriental Life Insurance Company, a foreign firm and the very first insurance provider in India, emerged in 1818.  

India had to wait 52 more years to get its first homegrown insurance company called Bombay Mutual Life Assurance Society. There were a bunch of other insurance providers that came after as well. 

But multiple wars in the early and mid-1900s meant quick liquidation of life insurance policies. Moreover, private players were running insurance scams. These factors made life insurance relatively less desirable. 

Fast forward to 1956, 245 companies were brought together to form the state-backed Life Insurance Corporation of India. The goal was to simplify and add a layer of trust to life insurance. 

One could argue that this goal has been met. LIC is the biggest insurance provider in India by AUM of ₹37 trillion, which dwarfs its competitors and the GDP of countries like Austria, UAE, and others. You can also consult a Cube Wealth coach or download a Cube Wealth application. 

What Is LIC IPO?

In the Union Budget of FY23, FM Nirmala Sitharaman announced that LIC will become a publicly-traded company after 65 years of 100% government ownership. 

Retail investors will be able to invest in the upcoming LIC IPO, the scale of which could be so large that Paytm’s ₹18,300 crore-IPO may seem like the Empire State Building in front of the Burj Khalifa.  

The GoI plans to put up approximately 5% of its equity shares for sale in LIC’s upcoming IPO. This 5% disinvestment could end up raising a whopping ₹60,000 to ₹80,000 crores for LIC. 

Expected Date Of LIC IPO

Speculation about LIC’s IPO date has been rife ever since the media got a whiff of GoI’s plan. So far, what we know is that LIC’s public issue is on the upcoming IPO calendar for FY23. 

But, the economic climate across the globe is uncertain due to the ongoing conflict between Russia and Ukraine, the rising inflation in the US, and other factors.  

That’s why the latest LIC IPO news suggests that the GoI may even postpone the potentially biggest public issue in India to a later date. That said, investors can prepare for the LIC IPO by looking at the facts. 

Strengths And Risks Of LIC

Historical Revenue Of LIC India

Historical Asset Value Of LIC India

Historical Profits Of LIC India

FAQs 

1. What is LIC's Asset Under Management (AUM)?

Ans. As of my last knowledge update in September 2021, LIC's AUM stood at over 37 lakh crore INR, making it one of the largest institutional investors in India.

2. What is LIC's annual revenue and profit?

Ans. The annual revenue and profit of LIC can vary from year to year. For the latest financial figures, it's advisable to refer to the company's official financial reports or the prospectus released for its IPO.

3. Why is LIC going public with an IPO?

Ans. The government's decision to take LIC public through an IPO is aimed at raising funds, increasing transparency, and improving governance. It will allow LIC to access the capital markets for growth and expansion

4. How can I invest in the LIC IPO?

Ans. To invest in the LIC IPO, you'll need to have a brokerage account with a financial institution that participates in the IPO process. You can apply for shares during the IPO subscription period through your chosen brokerage.

Conclusion

The much-awaited LIC IPO may hit the markets in FY23 and could end up raising a whopping ₹60,000 to ₹80,000 crores. LIC is fabled for its high disposable income, AUM, and investments in public and private firms. 

While LIC has a lion’s share in the insurance market, India’s biggest IPOs have a less than stellar track record after being listed on the market. Take for example another state-backed company Coal India. You can also consult a Cube Wealth coach or download a Cube Wealth application. 

Coal India raised ₹15,200 crores at a price of ₹225 to ₹245 per share in 2010. 12 years later, Coal India is trading at ₹181.15 which is more than 20% less than its IPO price.  

That’s why investors must exercise caution when investing in IPOs, even if they’re state-backed. Either way, bookmark this blog for more latest LIC IPO news and facts.

Note: Facts & figures are true as of 21-03-2022. None of the information shared here is to be construed as investment advice. Exercise caution when investing in assets like stocks, mutual funds, alternative investments, and others.