LIC IPO- The Biggest Ever To Be Listed
The Initial Public Offering (IPO) of The Life Insurance Corporation of India (LIC) is all set to be opened on May 4. With this offering, the Government is planning to generate ₹20,557 Cr by selling 3.5 per cent of the stake from the earlier of 5 per cent before. With such publicity of the LIC IPO, the experts are suggesting that there will be many first-timers who are looking forward to growing their savings by investing in this initial sale. Several or almost all of those who do not have any prior experience are having the same doubt, whether they should take part in this subscription process or not.
The continuous green rally of the market after the time of the pandemic has lured many new and young investors to take the risk of their savings. The growth in opening the Demat account also surged ahead of the release of Insurance giant LIC’s IPO.
May will be the record-breaking month for the Demat Account openings, said CEO of Paytm Money, Varun Sridhar, “It (LIC IPO) is a milestone event for Indian capital markets.”
Should I Invest In LIC IPO As A First Timer or Not?
Secretary, Department of Investment and Public Asset Management, Tuhin Kanta Pandey said, Risk is outweighed by the successful listing, and modifying the issue size was a clever move with “fair and attractive” pricing. “We want to champion LIC as a long-term value creator in the equity markets. The IPO is the first step of long-term value creation for LIC shareholders.”
Equity research analyst, Angel One Ltd, Yash Gupta said while enlightening the first time investors, “Yes, First-time investors can apply for the LIC IPO, a good fundamental IPO at attractive valuations is a very good opportunity for first-time investors. Even retail investors get a discount of ₹45 per share on LIC IPO which gives more comfort to retail investors and the chance of getting losses becomes much lower. First-time investors can look at the LIC IPO for long-term investing.”
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LIC IPO Share Price Revises To ₹902-949, To Open On May 4
Views Of Other Major Entities
MD & CEO, Axis Securities, B. Gopkumar said, “We believe first-time investors should apply to the issue as it allows the applicant to invest in a market leader with a long growth runway. Though there is scepticism around first-time investing, we believe investors would be assured by the long legacy and the solid brand value and recall that LIC enjoys. Applying to the issue allows first-time investors to directly own a stake in a strong brand across ‘Bharat.’ Additionally, the expectation of a discount for retail and policyholders, enabling marginally higher returns, could push first-time investors towards the issue.”
Founder, Trading, Parth Nyati said, “LIC is the largest life insurer in India, with 61.6 per cent market share in terms of premiums (or GWP), and 71.8 per cent market share in terms of the number of individual policies issued as of December 31, 2021. LIC is synonymous with insurance in India and enjoys a phenomenal brand recall. We believe India’s highly underpenetrated life insurance space is still at a nascent stage and is attractively positioned to capture the huge growth opportunity. LIC enjoys many competitive advantages like strong brand value, extremely large scale of operations, a huge network of agents, and an envious distribution network. . The issue is priced at ~1.1 times Embedded Value, which is at a steep discount compared to its Indian & global peers. Nevertheless, first-time investors must be aware that the business of insurance is long-term in nature; therefore we recommend this issue for the long term only.”
