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LIC IPO Details, Launch Date, Financials, News & Latest Updates - Life Insurance Corporation IPO - YouTube
Channel: Groww
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Hi, some important details have been revealed about the LIC IPO and today we are going to tell you about them in this video
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In the budget 2021, finance minister Nirmala Sitharaman hinted about LIC IPO launching in financial year 2021-22.
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Government has kept a target of 2.1 lakh Cr of disinvestment.
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Chief Economic Adviser, K V Subramaniam also stated that the govt would sell 6-7% stake to raise 90000 Cr
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According to this valuation, company's market cap is 12.8 lakh Cr to 15 lakh Cr
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Right now the biggest company in term of market cap is Reliance which is 13.31 lakh Cr.
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According to this plan, LIC will beat Reliance and become the largest company by market cap
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Let's now speak about the company's financials and its key ratios
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LIC holds a market share of 67.82% in the life insurance sector but this is decreasing gradually
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Currently, LIC serves 30 Cr policies and has 22.5 lakh agents meaning their agent network is very strong.
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Currently, LIC has lots of real estate assets which have a great growth potential.
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LIC policy holders get sovereign guarantee which is the major selling point of their policies.
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The company had a revenue of 6.15 lakh Cr and a profit after tax of 2712.21 lakh Cr in the financial year 19-20.
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The net profit margin is 0.44% which is very low as compared to the industry.
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In the last 4 years, the sales of the company has compounded by 9.77%
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and the profit after tax has compounded by 1.88%
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If we go according to the expectations of the chief economic advisor, the company's PE ratio
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would go 10 times the industry PE ratio which seems very unrealistic.
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For your information, the industry's PE ratio is 51.98, HDFC life insurance is 105. 36
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and SBI life insurance is 59.81.
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Another valuation ratio is price to sales and according to the chief economic advisor,
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The price to sales ratio of LIC is between 2.09-2.44
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HDFC is 2.71 and SBI life insurance is 1.30
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The govt announced that they would reserve 10% of the IPO amount for policy holders.
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Other than this, the changes made by SEBI in IPO norms a few days back, LIC will benefit a lot.
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The rule till now was that, whatever is the market cap after the issue of IPO, 10%should be the issue of the IPO.
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meaning, if LIC had a market cap of 15 lakh Cr, they would have to issue an IPO of 1.5 lakh Cr
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but after the change, minimum of 10000 Cr plus 5% of the incremental amount beyond 1 lakh Cr
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meaning, if the market cap was 15 lakh Cr, then the issue size would have to be 85000 Cr
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The current status of the LIC IPO is in the valuation stage.
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Department of investment and public asset management have selected minimal advisors to perform LIC's valuation.
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After this, the company will submit its DHR-P document along with investment bankers to SEBI
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According to the news sources, the IPO should open only after October
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This would be India's biggest IPO, before this it was Coal India.
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whose issue size was 15314 Cr
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To get know more about IPO updates, subscribe the Groww channel. bye.
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