LIC IPO: The Life Insurance Corporation of India, or LIC’s chances to perform well at the bourses when the LIC IPO gets listed, just got higher. The state-run insurance company, set to open for the public anytime now amid volatile markets, has seen a jump in its first-year premium collection for the year ended March 31, 2022. The key metric soared 7.9 per cent to Rs 1.98 trillion for the time period, data reviewed by a media organisation showed.
According to data quoted by Mint, LIC ended its previous fiscal at 63.25 per cent market share. This was a lower number in a year-on-year basis. In March, however, the country’s largest insurer’s premium collections jumped to Rs 42,319.22 crore, a 51 per cent increase than the previous year, as per the data. The high premium collections, especially in March, will give the government a boost as it gears up to sell shares of LIC through its initial public offering (IPO) for the first time to meet its divestment targets.
In the year ended March 31, 2022, LIC sold 21.7 million insurance policies, which is a 3.54 per cent jump than that of the last fiscal, the data reviewed by Mint showed. This has shot up by company’s market share to as much as 74.6 per cent in terms of policies sold. Around 4.9 million policies were sold in March alone, pushing the market share to 81.2 per cent with a jump of 4.88 per cent on a year-on-year basis.
The government will conduct a meeting of high-level committee later this week to finalise the size and timing of the LIC IPO, an official in the know told Mint requesting anonymity. The insurer plans to reduce its valuation by 30 per cent and offer 7 per cent of its shares to the public against 5 per cent earlier. The government is now mulling a valuation of around Rs 11 lakh crore from the LIC IPO against Rs 16 lakh crore it had thought of earlier.
“While LIC’s individual single premium collections increased by 61 per cent to Rs 4,018.33 crore in March, group single premiums increased by 48.1 per cent to Rs 30,052.86 crore, according to the data,” Mint said in its report.
The success of LIC IPO is hugely dependent on the performance of the insurance behemoth, as the government in turn depends on the initial share sale to meet its divestment target of Rs 65,000 crore. While the LIC IPO was set to launch by FY22, the Russia-Ukraine war and the choppy situation in the stock market derailed the timeline. On March 1, finance minister Nirmala Sitharaman said, “Ideally, I’d like to go ahead with it because we’d planned it for some time based purely on Indian considerations. But if global considerations warrant that I need to look at it, I wouldn’t mind looking at it again.”
Several companies are giving its attention to the mega LIC IPO, which the government wants to launch by the last week of April, while two companies have promised to to invest Rs 18,000 crore to bankers managing the LIC IPO,
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