Want To Invest In Crypto?
Explore Tikka Token.
Investing Related

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

Discover important facts and figures around the upcoming LIC IPO as we walk you through the history, financials, strengths, and weaknesses of India’s biggest insurance provider.
March 21, 2022

Schedule a call based on your convenience. And get an expert to help you invest.

Top 5 Reasons To Try Our Powerful Investment App!

  • High Quality MFs
  • Top Notch Stock Advisory
  • Expert Financial Advisors
  • Alternative Investments
  • Low Minimum Investments

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.

Metric

Figure

Established

1956

Owned By

Government of India

Agents (Individual)

13.5 lakhs

AUM

₹37 trillion

Revenue

₹7.04 trillion

Profit

₹2,906 crores

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

LIC Strengths

LIC Weaknesses

Biggest insurance provider in India.

Premiums are significantly costlier than private insurers. 

AUM is over ₹37 trillion while closest competitor HDFC Life has an AUM of ₹1.37 trillion.

Hampered by the traditional way of working and a lack of modern technology adoption.

13.5 lakh agents work for LIC alone while 11 lakh agents work for the rest of the private insurance industry combined.

Over 8 lakh LIC agents left the organization across the past 3 years.

Highest market share for new business premiums at 61%.

Individual agents are notorious for misselling which leads to a loss of trust in the product offerings.

Historical Revenue Of LIC India

LIC Historical Revenue
LIC Historical Revenue

Historical Asset Value Of LIC India

LIC Total Assets
LIC Total Assets

Historical Profits Of LIC India

LIC Profits
LIC Profit

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.  

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.

Shriram Shekhar
Shriram is a Content Marketer at Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner. He has developed cutting edge IT products for over 2 years before turning to his passion for the written word. Shriram’s love for philosophy, product development, and empowering people through quality content is what got him to Cube Wealth.

Top 5 Reasons To Try Our Powerful Investment App!

Schedule a call based on your convenience. And get an expert to help you invest.

  • High Quality Mutual Funds
  • Top Notch Stock Advisory
  • Invest in U.S. Stocks
  • Alternative Investments
  • Low Minimum Investments
Try Cube’s Exclusive Wealth Concierge Service! We offer a 10-minute portfolio analysis and set up service to select users.

Want the best
investment blog delivered straight to your inbox?

Thank you for joining our mailing list!
Oops! Something went wrong while submitting the form.

Similar Posts

SIP Posts

All

Calculate your
SIP returns

Calculate your
Lumpsum returns

Grow your money without wasting time

on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!