The IPO of Life Insurance Corporation of India (LIC), the country’s largest company, could create a large base of retail investors. With this, the number of Demat accounts can be increased by 20 crores. Interest in investors is being seen about this IPO.
80 thousand crores rupees will be the worth of the IPO
Motilal Oswal, chairman of Motilal Oswal Financial Services, says LIC’s listing will be the largest in India so far. Its market capitalization can overtake companies like Reliance Industries, HDFC Bank, TCS. Based on its current asset under management and business premium, its valuation will be more than Rs 8 lakh crore. The government wants to raise 80 thousand crore rupees from the market through it. That is, about 10 per cent stake will be sold.
LIC’s listing will also affect global markets
They say that listing of LIC could change the weightage of the country’s stock market in a big way in the global equity markets. The government may see the participation of retail investors on a large scale in this IPO. It will issue shares to employees and unitholders. This stock will be at a discount and because of this new investors will come in the market. It is estimated that 200 million new Demat accounts can be opened. It has about 1.25 lakh employees. 32 crores it has a policy. This suggests that at least 40 million retail Demat accounts can grow from its IPO.
Retail can get a share of 25 thousand crores
In the biggest IPO to date, if we look at the Coal India IPO, the retail share in it was 2.1 times. It was an IPO of 15 thousand crores. LIC will raise 80 thousand crore rupees and if it is considered to be 35 per cent retail share, then about 25 to 28 thousand crores will go to retail share. This would be two and a half times the retail portion of Coal India’s IPO.
This financial year will be an attractive IPO
Statistics show that the IPO gave a good return in 2019. This year, all eyes are on the IPO of LIC. LIC is the largest insurance company in the country and also the largest financial institution. LIC has a market share of 75 per cent in terms of policy with assets of Rs 31 lakh crore. It has a 66 per cent stake in First Year Premium. Its net profit is 2.6 lakh crores.
The total investment is 20 lakh crores
LIC is also the largest institutional investor company in the country. Its total investment is 20 lakh crores in the country. Among the life insurance companies listed recently are HDFC Life, SBI Life, ICICI Prudential Life. All three have attracted investors. After listing, LIC will be the most valuable listed company in the country. It will also attract foreign investment.