Airtel ₹11.9 Lakh Cr — Should You Rebalance Your Portfolio?

Gold has always been a popular investment option for investors. The yellow metal has been used as a store of wealth and a medium of exchange throughout history.

However, in the past few years, there has been a global surge in gold prices due to the global economic slowdown and rising inflation.

With the increase in gold prices, investors are now looking at investing in gold as an investment option. This has increased demand for gold-related products, including gold ETFs and gold mutual funds.

These products provide an easy way to invest in gold without taking possession of physical gold.

In this blog, we will discuss taxation on different types of gold investments like physical gold, digital gold, paper gold, and Gold derivatives.

Get the detailed information about Tax on Gold Investment Call us at 0120 4400700

Different Types of Gold Investments in India

Physical Gold

If you want to buy physical gold, then there are several options. You can choose between bars and coins, which are available in a wide range of sizes and weights. There is also jewellery, which can be bought directly from the manufacturer or a jeweler.

Digital Gold

Another way to invest in gold is through digital options like exchange-traded funds (ETFs). These are typically traded on stock exchanges just like stocks, bonds, and mutual funds but instead, represent shares in physical assets such as oil or gold bullion stored in vaults somewhere else in the world.

Also Read about Venus Pipes Limited IPO

Derivative Contracts

Derivative contracts are agreements between two parties to purchase or sell something at a future date for an agreed-upon price.

Derivative contracts are used to hedge risk and speculate on future prices by buying or selling gold contracts before they expire.

Paper Gold

The most common type of derivative contract is paper gold. Paper gold refers to trading on futures exchanges without taking possession of gold itself.

Paper gold also includes options that give buyers or sellers the ability to buy or sell futures contracts at a specified price within a specified period of time.

Tax on Gold Investment in India

Tax on Physical Gold Investment

Any individual who sells physical gold will be subject to a 20% tax rate and 4% cess on LTCG(Long-term capital gain).

If you sell gold within three years of buying it, it is considered short-term; if sold after three years, it is considered long-term.

Know more about Strategies to Invest in Commodity Trading

Tax on Digital Gold

If you sell your digital gold after holding it for less than three years, then you will be taxed at applicable income tax slab rates. However, if you hold your digital gold for more than three years, then long-term capital gains tax is applicable on selling it at 20.8% (including cess) with the indexation benefit.

The easiest way is by buying shares of an exchange-traded fund (ETF) which tracks some measure of gold prices, such as GLD or GDXJ.

But these ETFs don't always track real physical gold and may use futures contracts instead, which may not always be liquid enough to trade easily.

Tax on Gold Derivatives

In India, the taxation of derivative contracts is quite a complicated process. It involves several aspects such as capital gains tax, dividend distribution tax, and income tax.

When a company's annual revenue is less than Rs 2 crore, 6% of the profits are taxed. Taxation on derivatives contracts can be claimed as company income, lowering the tax burden associated with such transactions.

Also Read about Delhivery Limited IPO

Tax on Paper Gold

Long-term capital gains taxes are 20% + 4% less if you buy gold through mutual funds or ETFs.

If you buy physical gold and then sell it, you will have to pay long-term capital gains tax on the profit. The long-term capital gains tax rate is 20% + 4% less if you buy gold through mutual funds or ETFs.

However, if you sell the physical gold after holding it for more than one year, that transaction would be considered a long-term capital gain and taxed at 20%.

Final Note

Gold is considered to be the most valuable commodity in terms of its weight, purity, and durability.

The value of gold has been recognized since ancient times, which is why it has always been considered a storehouse of value by people from all over the world. Several countries have allowed their citizens to invest in gold as a way to save for the future.

Venus Pipes & Tubes Limited (“Venus Pipes”) was incorporated on February 17, 2005. Venus Pipes is a pipes and tubes manufacturer with the sole focus on manufacturing welded and seamless pipes in a single metal category, i.e., stainless steel.

• The company manufactures stainless steel tubular products in 2 broad categories: (i) seamless tubes/pipes; and (ii) welded tubes/pipes.
• Under their brand name “Venus”, they supply their Products for applications in diverse sectors including Chemicals, Engineering; Fertilizers; Pharmaceuticals, Power, Food Processing; Paper; and Oil and Gas.
• Venus Pipes has one manufacturing plant which has separate seamless and welded divisions with the latest product-specific equipment and machinery. As of February 28, 2022, their Manufacturing Facility has a total installed capacity of 10,800 MTPA. They are proposing to expand their existing manufacturing capacity for welded pipes/tubes and seamless pipe/tubes.
• As of February 28, 2022, they have exported their products to 20 countries including Brazil, the UK, Israel and countries in the European Union, etc.

Outlook & Valuation

The company has grown well in the last three financial years due to improvements in the commodity cycles and high steel prices. The company’s current capacity utilization is above 90% and the company expects to more than double its capacity using the SME IPO proceeds. Further, they also plan to set up a piercing line for manufacturing hollow pipes with the capacity of 800 MT per month, as their backward integration strategy.

With the piercing plant, they will be able to produce hollow pipes from the SS round bar. Their products are largely used in industries like pharmaceuticals, food processing, etc. The GoI has announced Production Linked Incentive (“PLI”) schemes for boosting the domestic manufacturing in certain sectors, which shall have a consequent positive impact on their order book.

And schemes like Make in India, and Atmanirbhar Bharat that focus on indigenous manufacturing augur well for the company. China export rebate cessation and BIS norms provide industry tailwinds. The company has priced the issue at a P/E of 21.03 based on annualized numbers for FY22 which is slightly above its industry median P/E. Further, the commoditized & cyclical nature of the business and small issue size makes this issue suitable for aggressive investors only with a long term view.

KEY MANAGERIAL PERSONNEL

• Jayantiram Motiram Choudhary is the Chairman, Non-Executive Director and one of the Promoters of the company. He has been associated with the company since its incorporation. He has over 10 years of experience in the steel industry and over 4 years of experience as a director of Accuracy Shipping Ltd.
• Arun Axaykumar Kothari is the Promoter, Managing Director and CFO of the company. He has been associated with the company since September 14, 2021. He looks after and manages the entire accounting and financial operations of the company and is responsible for setting processes, systems and procedures in place to control and streamline the financial and commercial transactions of the Company.
• Pavan Kumar Jain is the Company Secretary and compliance officer. He has also been associated with the company since August 18, 2020. He has around 3 years of experience in finance, accounting and secretarial work.
• Kumar Shishir C Sinha is the president (marketing) of the company. He has been associated with the company since March 01, 2021. He has over 30 years of experience in stainless steel pipes and tubes.
• Kunal Bubna is the president (finance and accounts) of the company. He has been associated with the company since July 01, 2021. He has over 14 years of experience in accounting and secretarial work.
• Bharat Kumar Prajapati is the production head of the company. He has been associated with the company since September 02, 2020. He has over 20 years of experience in the pipe industry.
• Om Prakash Mishra is the vice-president (operations) of the company. He has been associated with the company since December 13, 2021. He has over 23 years of experience in the manufacturing industry.

COMPETITIVE STRENGTHS

• International Accreditations and product approvals
• Specialized production of Stainless Steel Pipes and Tubes
• Multi-fold demand of the Products
• Customer Diversification
• A key beneficiary of CAPEX in the chemical and engineering sector
• Venus supplies high-quality pipes for industrial use (B2B) and does not cater to the lower-end market of domestic furniture, retail, etc.

KEY STRATEGIES

• Increasing existing capacity
• Backward integration and cost optimization to improve margins
• Tap new geographies to increase export
• Continue to improve operating efficiencies through technology enhancements

KEY CONCERNS

• The issue size is too small.
• Valuation is on the higher side.
• Cyclical and commoditized industry
• Highly competitive industry.

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the CompanyEPS (Basic)NAVP/ETotal Income (Cr)RoNW (%)Venus Pipes & Tubes Ltd18.0430.4828.01312.059.18%Jindal Saw Ltd10.02218.399.6910,872.04.69%Ratnamani Metal & Tubes Ltd59.07425.3541.512,341.513.9%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital8.738.738.73Other Equity31.207.543.44Net Worth39.9316.2812.17Revenue from Operations309.33177.81118.75EBITDA34.7811.648.29Profit Before Tax30.956.494.95Net Profit for the year23.634.133.75

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The contents of this document are for information purposes only. This document is not investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company.

All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment.

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The users of this document must bear in mind that past performance if any, are not indicative of future results. The actual returns on investment may be materially different from the past. Investments in Securities market products and instruments included in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low-risk tolerance.

Such investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risk factors before making any investment in the Equity Shares of the Company.

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अमेरिकी फेडरल रिजर्व की सख्त नीतियों के कारण डॉलर के मजबूत होने से सोने और चांदी के भाव तीन महीने के निचले स्तर के करीब आ गए है। डॉलर 20 साल के उच्चतम स्तर पर पहुंच गया है।  निवेशक मंदी को लेकर चिंतित हैं इसलिए मुद्रा को बढ़ावा देने वाली नीतियों को अपना रहे है जिससे कीमती धातुओं के साथ शेयर बाज़ारो में भी गिरावट देखी गई है।

फेड चेयर जेरोम पॉवेल ने स्थिर कीमतों को अर्थव्यवस्था का "आधार" बताया है, साथ ही गुरुवार को हुई स्पीच में कहा कि मुद्रास्फीति को शांत करने के लिए केंद्रीय बैंक की लड़ाई में "कुछ दर्द शामिल रहेगा" क्योंकि उच्च ब्याज दरे सभी को प्रभावित कर सकती है। उनके मुताबिक मुद्रास्फीति का लगातार बढ़ना, ब्याज दर में वृद्धि से ज्यादा घातक होगा।

आर्थिक आकड़ो में, गुरुवार को जारी अमेरिकी मुद्रास्फीति अनुमान से बढ़कर 8.3 प्रतिशत रही जबकि चीन में भी मुद्रास्फीति और  पीपीआई के आकड़ो में बढ़ोतरी रही है। भारत में मुद्रास्फीति साल-दर-साल अप्रैल में बढ़कर 7.79 प्रतिशत हो गई है जो पिछले माह 6.95 प्रतिशत पर थी। कीमतों में लगातार बढ़ोतरी प्रमुख केंद्रीय बैंको पर ब्याज दर वृद्धि का दबाव बढ़ा रहा है।

हालांकि, गुरुवार को जारी अमेरिकी प्रोड्यूसर प्राइस इंडेक्स (पीपीआई) ने अप्रैल में महीने-दर-महीने 0.5 प्रतिशत की वृद्धि दिखाई, जो मार्च में 1.6 प्रतिशत की वृद्धि की तुलना में धीमी है, लेकिन ऊर्जा उत्पादों की बढ़ती लागत का दबाव थोड़ा कम रहने से पीपीआई आकड़ो में कमी दर्ज की गई है। बढ़ती हुई मुद्रास्फीति का मुख्य कारण महामारी और युद्ध है। फेड चेयर जेरोम पॉवेल ने जून और जुलाई में 0.50 प्रतिशत की ब्याज दर वृद्धि के संकेत दिए है।

जिससे सोने और चांदी की कीमतों में लगातार दबाव बना हुआ है। घरेलु वायदा सोने के भाव पिछले सप्ताह 2.5 प्रतिशत और चांदी के भाव 6 प्रतिशत टूट गए है। जिससे सोना 50000 रुपये प्रति दस ग्राम और चांदी 58800 रूपये प्रति किलो के निचले स्तरों पर कारोबार कर रही है।

तकनीकी विश्लेषण:

सोने और चांदी के भाव में इस सप्ताह  फेड चेयर जेरोम पॉवेल के बयान होने से, भाव दबाव में रह सकते है। सोने में 49500 रुपये पर सपोर्ट है और 51000 पर प्रतिरोध है। चांदी में 56000 रुपये पर सपोर्ट और 60500 रुपये पर प्रतिरोध है।

About Delhivery Limited IPO

• Delhivery Limited (“Delhivery”) was incorporated on June 22, 2011. Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of Fiscal 2021.
• Delhivery provided supply chain solutions to a diverse base of 23,113 Active Customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals.
• Their in-house logistics technology stack is built to meet the dynamic needs of modern supply chains. They have over 80 applications through which they provide various services.
• Delhivery collects, structures, stores and processes vast amounts of transaction and environmental data to guide real-time operational decision making.
• Delhivery operated 21 fully and semi-automated sortation centres and 82 gateways across India (excluding Spoton) as of December 31, 2021.
• They had a Rated Automated Sort Capacity of 3.70 million shipments per day as of December 31, 2021.
• Delhivery operates a pan-India network and provides its services in 17,488 postal index number (“PIN”) codes, as of December 31, 2021.

Outlook & Valuation

The company has a good track record of execution built on its proprietary technology and has scaled up significantly since its incorporation in 2011 to emerge as the largest fully-integrated logistics player in the country.

The runway of opportunity also appears good given India’s long-term growth prospects and the crucial role logistics plays when it comes to commerce. Another point to note is that, in India, the share of organized players is much lower compared to developed countries.

It reported revenue from operations of ₹4,811 crores for the nine months ended December 21. Annualizing this implies a very strong FY19-22 revenue CAGR of around 57 per cent.

However, the high growth of the company is due to the acquisitions made, organic growth has been slower in comparison to overall growth. The company does not have a past track record of profitability given its focus on growth.

While it has reached near break-even on an adjusted EBITDA basis for nine-month FY22 (adjusted EBITDA margin of negative 0.72%), the profitability at net profit levels is yet to be seen and depends on a lot of variables in the future. Investors need to note that the logistics business is a low-margin business and the scale of operation determines the profitability due to operating leverage.

Nevertheless, the current market environment is not conducive to aggressive risk-taking when it comes to unprofitable companies.

The issue is priced at a Price to Sales ratio of 5.4 (based on annualized revenues of 9 months ending December 2021). We suggest investors enter the company post listing after analyzing how the business evolves in terms of revenue growth and profitability. Thus, we recommend “Avoid” the issue.

KEY MANAGERIAL PERSONNEL

• Sahil Barua is the Managing Director and Chief Executive Officer of the company. He has previously been associated with Bain & Company India Pvt. Ltd. as a Consultant.
• Sandeep Kumar Barasia is the Executive Director and Chief Business Officer of the company. He was previously associated with Bain & Company India Pvt. Ltd. as a Vice-President (Partner).
• Kapil Bharati is the Executive Director and Chief Technology Officer of the company. He has previously served as Founder and Chief Technology Officer at Athena Information Solutions Pvt. Ltd. and as Senior Manager of Technology at Sapient and Publicis Sapient.
• Ajith Pai Mangalore is the Chief Operating Officer of the company. He has been associated with the company since April 6, 2013.
• Amit Agarwal is the Chief Financial Officer of the company. He has been associated with the company since August 4, 2012.
• Pooja Gupta is the Chief People Officer of the company. She has been associated with the company since April 1, 2021.
• Sunil Kumar Bansal is the Vice President - of Corporate Affairs, Company Secretary and Compliance Officer of the company. He has been associated with the company since August 23, 2021.

COMPETITIVE STRENGTHS

• Rapid growth, extensive scale and improvement in unit economics
• The proprietary logistics operating system
• Vast data intelligence capabilities
• The integrated portfolio of logistics services
• Strong relationships with a diverse customer base
• Extensive ecosystem of partners, enabling an asset-light business model and extended reach

KEY STRATEGIES

• Expand investments in infrastructure and network
• Continue to build scale in existing business lines
• Deepen the customer relationships
• Enhance the technology (software and hardware) capabilities
• Expand into high-growth international markets similar to India

KEY CONCERNS

• The company is not yet profitable.
• The issue is overvalued compared to its peers.
• The high growth is due to acquisitions, thus organic growth remains slower.
• The overall industry is highly competitive

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the CompanyEPS (Basic)NAVP/ETotal Income (Cr)RoNW (%)Delhivery(8.05)54.79*●+38,382.91(14.66)Peer GroupBlue Dart Express Ltd42.91249.48150.3732,923.6017.08TCI Express Ltd26.15112.8966.888,516.4023.12Mahindra Logistics Ltd4.1679.65119.3932,811.905.05

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital16.339.759.58Other Equity27,997.6531,302.5933,481.53Net Worth28,367.9731,704.0633,882.83Revenue from Operations36,465.2727,805.7516,538.97EBITDA(1,370.71)(1,720.47)(1,003.79)Loss Before Tax(4,157.43)(2,688.02)(17,833.04)Net Loss for the year(4,155.37)(2,679.61)(17,837.63)

Multi-asset funds are usually meant for those investors who are risk averse. They don't have much experience in the stock market, but want to earn good stock trading returns on their investments.

These funds invest in stocks, bonds and other fixed income instruments. The percentage of each depends on the fund manager's market analysis. They can keep the same equity exposure or increase it if they think the market is going up.

This makes multi asset funds less volatile than pure equity funds, as they also invest in fixed income instruments which provide stability to the portfolio. Multi asset funds have lower returns than pure equity funds, but higher than debt funds.

Get the detailed information about Multi-asset funds Call us at 0120 4400700

How is a multi-asset fund different from an equity mutual fund or a debt mutual fund?

A multi-asset fund is a type of mutual fund that invests in a variety of asset classes.

While most funds invest only in stocks (equity funds), or in bonds (debt funds), or in a combination of stocks and bonds (balanced funds), multi-asset funds take this concept to the next level and invest in other asset classes as well.

These asset classes include real estate, gold, commodities, and international stock exchanges.

The allocation between these asset classes depends on the underlying objective of the fund.

For example, if the objective is capital protection, then the fund will have a relatively higher allocation towards debt and gold, while equity exposure will be low.

If the objective is moderate growth with modest volatility, then the allocation will be more towards equity than debt.

Benefits of Investing in Multi-asset Funds

There are many good and valid reasons to invest in Multi-Asset Funds. These funds can be a boon for investors who have a low-risk appetite or are looking to diversify their portfolio.

Here are some benefits of investing in Multi-Asset Funds

1. Diversification and Lower Risk

One of the most important advantages of multi-asset funds is diversification.

Apart from diversification across sectors, they also offer diversification across asset classes such as equity, debt, real estate, gold etc.

Investing in different asset classes means diversifying your portfolio to spread out your risk. It is advisable not to put all your eggs in one basket.

2. Flexibility of Investments

Multi-asset funds offer greater flexibility as they can invest in any class or combination of asset classes depending on the market conditions and the fund manager’s outlook towards particular assets.

Such flexibility enables them to outperform over longer periods of time when compared to other single asset class investment options such as equity or debt mutual funds.

3. Managing Inflation

If you’re investing for the long term, managing the impact of inflation is critical to ensure that your savings retain their value over time.

By investing in multi-asset funds, you are investing in a basket of assets that have a higher return potential than a single asset class, helping you beat inflation.

4.Portfolio Customization

Multi-asset funds also offer the flexibility to invest in different asset classes with varying risks and returns.

For example, if an investor has excess exposure to equities through their SIPs, they can invest in a multi-asset fund that has exposure to debt and other asset classes like gold.

This offers them the flexibility to customize their portfolio based on risk appetite and investment goals. Want to know more about Multi-asset Funds feel free to contact us.

Final Note

A multi-asset fund is an all-weather option for an investor, as it invests across various asset classes and sectors, thereby reducing the overall risk of the portfolio. This makes multi-asset funds suitable for investors who have a moderate risk appetite.

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, 2022Issue Close on May 9, 2022Total IPO size (cr)19,517- 20,557Fresh issue(cr)-Offer For Sale (cr)20,557Price Band (INR)902 - 949Market Lot15 shares Face Value (INR)10 Retail Allocation 35% Listing On May 17, 2022

Issue Break-up (%)

QIB Portion50NIB Portion15Retail Portion35

Shareholding (No. of Shares)

Pre Issue6,324,997,701Post Issue6,324,997,701

Indicative Timetable

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

KEY MANAGERIAL PERSONNEL

• 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.

COMPETITIVE STRENGTHS

• 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.

KEY STRATEGIES

• 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.

KEY CONCERNS

• 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.

COMPARISON WITH LISTED INDUSTRY PEERS (AS OF 31ST MARCH 2021)

Name of the Company EPS (Basic)EV Rs. BNP/EV Total Income (Cr)RoNW (%) Life Insurance Corporation of India 4.705, 396.81.1405, 85045.65% Peer Group SBI Life Insurance Co.14.55302.03.7750,25014.00%HDFC Life Insurance Co.6.74295.43.9638,58015.75%ICICI Prudential Life Insurance Co.6.66302.02.4935,73010.48%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital100.00100.00100.00Other Equity6,705.47891.66798.44Net Worth6,514.64854.65815.33Premium Earned405,398.50382,475.52339,971.63Income from Investments285,520.42242,836.31225,043.54EBITDA2,980.352,718.522,642.37Net Profit for the year2,974.142,710.482,627.38