LIC, IPO: Date, valuation, size, and price listing in share market may less than Reliance and TCS

LIC's IPO has been the talk of the town for the past several months and investors are waiting for it. The central government is also speeding up the process.

The stock market has been fluctuating steadily over the last several months, with IPOs being floated in a number of sectors, which have seen investor gains. It is said that a large number of IPOs will be launched in the year 2022 as well.

Investors are eagerly awaiting the IPO of LIC, the country's largest insurance company. It was believed to be the most valuable company in the country, but the government could evaluate it at a much lower price than expected.

If this happens, LIC will be the third most valuable company in the country after Reliance Industries and TCS, owned by Mukesh Ambani, the richest man in the country. LIC is said to be valued at less than Rs 10 lakh crore.

At present, Reliance Industries has a market cap of Rs 16 lakh crore and TCS has a market cap of Rs 13.8 lakh crore. Even after the Conservative valuation, LIC's IPO will be the largest issue in the country so far.

To encourage policyholders to participate in the IPO, LIC will issue shares to them at a discount. The company wants policyholders to participate as the distribution of the surplus will change in the future.

According to insurance industry sources, LIC's managed assets (AUM) cannot be compared to the assets of private companies. This is because the bulk of LIC's funding comes from guaranteed return plans, group insurance funds, and employee retirement funds.

The margin in this business is very low. At present, the State of India's SBI Life Insurance has a market cap of Rs 1.2 lakh crore and an AUM of Rs 2.4 lakh crore. Actuarial firm Milliman has submitted its report on the embedded value of LIC.

Meanwhile, LIC's IPO is unlikely to come in the last quarter of the current financial year, according to reports. The Centre's investment department, which oversees state-owned companies, has denied the allegations.

However, the exact date of LIC's IPO has not been announced. Deepam said LIC plans to launch an IPO in the last quarter of this year and preparations are underway.

The evaluation of LIC is taking more time than required and hence the formalities related to it have not been completed. In addition, there are a number of issues in completing the LIC assessment.

This information was given by a senior official working with a merchant banker. Although LICs are evaluated, there are a number of regulatory procedures that must be completed prior to an IPO.

The size of LIC's share sale can be determined after valuation. The process of listing a company on the stock exchange in India is so complicated that even after the completion of the LIC valuation, it may take three to four months to complete the rest of the process.

LIC is one of the largest insurance companies in the world. Its valuation is fraught with problems, as its large-scale products, real estate assets, affiliates, and profit-sharing structures are complex.

That is why LIC's IPO is unlikely to come in the current financial year, claims an official associated with the Merchant Banker. The Government of India wants to meet the target of Rs 1.75 lakh crore through LIC and BPCL.