Investor talks for the initial public offering (IPO) of Life Insurance Corporation of India are underway and the draft prospectus is also expected to be filed by the end of this month. “Preparations are in full swing for the IPO of LIC. Presentations are being made to the investors,” said a person familiar with the development.
“The draft red herring prospectus is likely to be filed by end-December. The updated business figures for the first six months of the fiscal – April to September 2021, will be provided in it,” the person added. This would be a step forward in the mega IPO of the life insurance behemoth. The government is hoping to launch the IPO in the fourth quarter of the fiscal year.
Agents – the backbone of LIC
According to the source, the presentations have highlighted LIC’s leadership position in the country’s life insurance segment and how individual agents form its backbone. LIC held four per cent of the total NSE market capitalisation and had ₹ 8-lakh crore investment in equities in 2020-21.
As of March 31, 2021, LIC had 13.5 lakh agents with a 55 per cent market share by agents. There are about 15.3 policies per agent. Individual agents sold 70,12,193 policies in the first six months of 2021-22. LIC also registered a 32.04 per cent increase in the first year premium in November this year though it reported a 0.93 per cent de-growth in the first year premium between April and November this year.
The government has already finalised the book running lead managers and some other advisors for the IPO of LIC. It has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory to manage the sale.