Life Insurance Corporation of India (LIC IPO)

Life Insurance Corporation of India IPO

About LIC

Life Insurance Corporation of India (“LIC”) was established on September 1, 1956, under the LIC Act by merging and nationalizing 245 private life insurance companies in India. LIC has been providing life insurance in India for more than 65 years and 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 (or NBP), a 71.8% market share in terms of a number of individual policies issued, an 88.8% market share in terms of a number of group policies issued for Fiscal 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at December 31, 2021.

    • LIC is ranked 5th globally by life insurance GWP (comparing the LIC’s life insurance premium for Fiscal 2021 to the global peers’ life insurance premium for 2020) and 10th globally in terms of total assets (comparing the LIC’s assets as of March 31, 2021, with other life insurers’ assets as at December 31, 2020).
    • LIC is the largest asset manager in India as of December 31, 2021, with AUM of ₹40.1 trillion, on a standalone basis which is 1.1 times the entire Indian mutual fund industry’s AUM.
    • The company’s product focus is more on PAR Products
    • The primary distribution channel for an individual business is the agency, which accounted for 96.2% of NBP for individual products as of Dec ’21.
    • The favourable demographic tailwinds support India’s growth story, combined with under penetration in life insurance. GWP for life insurers is forecasted to grow at 14-15% CAGR in FY21-26 to reach Rs. 12.4 lakh crore.

Issue Offer

Issue Opens on May 4, 2022
Issue Close on May 9, 2022
Total IPO size (cr) 19,517- 20,557
Fresh issue(cr)
Offer For Sale (cr) 20,557
Price Band (INR) 902 – 949
Market Lot 15 shares
Face Value (INR) 10
Retail Allocation 35%
Listing On May 17, 2022

Issue Break-up (%)

QIB Portion 50
NIB Portion 15
Retail Portion 35

Shareholding (No. of Shares)

Pre Issue 6,324,997,701
Post Issue 6,324,997,701

Indicative Timetable

Finalisation of Basis of Allotment May 12, 2022
Refunds/Unblocking ASBA Fund May 13, 2022
Credit of equity shares to DP A/c May 16, 2022
Trading commences May 17, 2022

Objects of the Issue

    • To carry out an offer for
    • To achieve the benefits of listing

Outlook and Valuation

LIC’s embedded value, which is a measure of the consolidated shareholder’s value in an insurance company, is around Rs 5.4 lakh crores as of September 30, 2021. So, at a valuation of ~Rs. 6 lakh crores, the issue is priced at a Price to Embedded Value of ~1.1,  which is at a discount compared to its listed Indian as well as global peers. LIC is synonymous with insurance in India and enjoys a huge competitive advantage in terms of brand value, a huge network of agents and behemoth scale.

However, there are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins and short term persistency ratios, but the valuation at Price to Embedded Value of 1.1 discounts the above concerns.

The company plans to focus on protection products, non-par products, and linked products to improve its VNB margins in the future. The issue has an Rs. 60 discount for policyholders and an Rs. 45 discount for employees and retailers.

Nevertheless, investors must be aware that the business of insurance is long term in nature; therefore we recommend this issue for the long term only.


    • Raj Kumar is the Managing Director of LIC. He joined LIC in the year 1984 and has experience in the insurance sector. He has also served as the CEO of LIC Mutual Fund Asset Management Ltd and was also the zonal manager, Bhopal, executive director (estate and office services), Mumbai, amongst others, of LIC. He was also the senior divisional manager of the Gorakhpur and Jaipur divisions of LIC.
    • Siddhartha Mohant, Ipe Mini, and Bishnu Charan Patnaik are the other three managing directors.
    • Pramod Ranjan Mishra is the Executive Director (investment operations) and Chief Investment Officer of LIC. Previously, he has held various other positions in LIC and has also held the position of CEO, LIC (Nepal) Ltd.)
    • Muraleedharan Purushothaman is the Executive Director – of marketing/ product development and chief marketing office of LIC. He joined LIC on November 1, 1985. He has also held several other positions in LIC and was also the CEO of Life Insurance Corporation (Nepal) Ltd.
    • Sunil Agrawal is the Chief Financial Officer of LIC. He joined LIC on February 21, 2022.
    • Tablesh Pandey is the Executive Director (investment – risk management and research)/ chief risk officer/ actuarial core group central office) of LIC. He joined LIC on February 22, 1988.
    • Pawan Agrawal is the Company Secretary and Compliance Officer of LIC. He joined LIC on April 16, 2021.


    • 5th largest life insurer globally by GWP and the largest player in the fast-growing and underpenetrated Indian life insurance sector.
    • A behemoth, having a huge scale leading to one of the lowest operating expense to income ratios in the Industry.
    • Great brand value and product recall.
    • The largest network of agents.
    • One of the largest distribution networks and geographical reach.
    • Largest asset manager in India with an established track record of financial performance and profitable growth.


    • Increasing market share of bancassurance channel by tying up with more bank partners and improving their productivity by providing them with digital solutions for on-boarding customers for their products.
    • Increasing up-selling and cross-selling to individual customers and beneficiaries of group products to cover their varied financial needs.
    • Improving the share of non-participating products by increasing the focus on sales of Ulip, protection products, pension/annuity products and health insurance.
    • Increasing direct sales of their individual products on their website by increasing marketing of their corporation’s website and adding more products that are available for purchase on their website.


    • The government will still be the major shareholder and key manager, thus any future government intervention or adverse action might be detrimental to shareholders.
    • Insurance is a complex business for novice investors to understand.
    • There are concerns with the company like losing market share to private players, lower profitability & revenue growth compared to private players, lower VNB margins, and short-term persistency ratios.
    • High dependency on agency network, increasing its commission costs.


Name of the Company EPS (Basic) EV Rs. BN P/EV Total Income (Cr) RoNW (%)
Life Insurance Corporation of India 4.70 5,396.8 1.1 405,850 45.65%
Peer Group
SBI Life Insurance Co. 14.55 302.0 3.77 50,250 14.00%
HDFC Life Insurance Co. 6.74 295.4 3.96 38,580 15.75%
ICICI Prudential Life Insurance Co. 6.66 302.0 2.49 35,730 10.48%


Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019
Equity Share Capital 100.00 100.00 100.00
Other Equity 6,705.47 891.66 798.44
Net Worth 6,514.64 854.65 815.33
Premium Earned 405,398.50 382,475.52 339,971.63
Income from Investments 285,520.42 242,836.31 225,043.54
EBITDA 2,980.35 2,718.52 2,642.37
Net Profit for the year 2,974.14 2,710.48 2,627.38

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