When LIC IPO will be listed in the stock market?
Zindagi ke saath bhi, Zindagi ke baad bhi, there will be no one in India who has not heard this line. This is LIC i.e. Life Insurance Corporation of India. India's biggest insurance company even afterlife with life. More than 2 lakh employees, more than 15 lakh agents, more than 30 crore policies shoot and IPO valuations are expected. It may be around 15 lakh crores, on a listing day, it may become India's largest listed company on Day One.
LIC is such a brand that we have been seeing since childhood, it is a very big brand, in such a situation, when it's detailed, it is very necessary to be excited. When the future of our family is at stake, then everyone wants that whenever something happens to me, then my family should get money, then LIC is enough. The biggest strength of LIC is its second distribution network all over India.
When we are talking because there are 2 lakh employees and 15 lakh agents i.e. no matter how many interiors you go from village to village, you will definitely get LIC policy. After some big controversies like LIC and Government of India and Railways, perhaps even the biggest landlords of this country come to their cities in those cities which are prime market places which have remained like the most valuable real estate.
In any city, one or more LIC buildings must have been seen there. LIC has a lot of money invested. In fact, the money that goes to the insurance company in the property in the buildings puts it in many such places from where it gets good returns and can give claims to the people, whose claims they have to pay and whose money has to be returned at a time. After that, they can return their money.
Institutional investors are also one of the largest companies investing in the stock market of India. You must have often heard that India also has mutual funds. India and some institutions and such who invest money but Life Insurance Corporation is the biggest player among them. For the past several years, governments have been using it to handle the market. When the market started growing, LIC has made big purchases. In this sense also, LIC has a lot of assets that are shared, there is a lot of money.
There is so much land property as it was said about the old shares that no one knows where the land is. It is not with LIC that no one is aware of it, but to calculate the spread of the property and do its valuation. Because before the IPO, valuation has to be done. The market value of each property will be its valuation of what it is currently worth in the market. It was a big calculation for this IPO. Two years ago the government had announced LIC's IPO.
Since then that exercise is going on and it is still being said that the government is in the process of submitting the IPO application or the draft red color prospectus to SEBI by the end of January this month and that means usually happens that two to four days and days a week will be active like SEBI. After that, the draft will be removed and DRHP will have the reading prospectus which will be implemented. The issue comes very quickly these days.
After the prospectus, it will be expected that according to this, LIC's IPO should come into the market may be in the month of February. Now the question is that everyone wants to know is how many shares the government will sell and at what price it will be decided. And the answer is that if you bet in LIC's IPO, then your money will be made or not. That will decide whether you will apply for it or not, which means that a large number of people will apply to LIC IPO.
Valuation of the LIC IPO:
However, the government is still waiting. It is reported from sources that the government is waiting for the final evaluation report that what should be its total price and after that the government also has to decide whether the government will sell 5% or 10% of it. So if an IPO of 5% comes out of this, then you understand 75 thousand crore rupees. If 10% pay comes, then its size will be 15 lakh crore rupees. This is not a small amount.
The biggest IPO of Paytm had come a few days ago in India, Paytm IPO has raised more than 40% of the INR 18,300 crores from the market. The people who had invested money in Paytm badly lost their money. In such a situation, this question will definitely arise, if the government brought LIC's IPO, it will keep the price like that, or what would happen if people did not put money properly in the shares when so many shares were raised in the market.
Its valuation will be around INR 12.6 lakh crore, i.e. the total value of the company is being estimated at INR 63,000 crore. It is a big IPO in which you want to invest your money, keep this in mind. LIC has applied for IPO with SEBI and filed the DRHP.
What do people think about the LIC IPO?
Many people are now afraid as we lost their money in Paytm. What if we will lose our money in LIC too? But on the other hand, the government also wants to get LIC listed as soon as possible. The reason for this is that the government's target of disinvestment of Rs.2 lakh crore is that in this year's budget, the target of raising a book value of Rs.2 lakh crore. This money will be raised through selling a stake in government companies, but LIC alone has the power to settle a large part of it.
The government is making many changes to the rules to make LIC's IPO a success. Foreign investors are allowed to invest money in insurance companies in India, but they were not allowed to invest money in LIC. LIC is not a general insurance company, LIC is a special company created under the Act. When LIC was created by the Government of India, it had found that they need the life insurance company of the country.
At that time it was considered a very important, and strategic type of work, so foreign investors are not allowed to invest money in LIC. The government is preparing to change the rules to give any exemption in LIC for foreign investors. The government is doing a lot more so that it can be easier for the people to invest money. LIC has been also sent messages to the policyholders, please correct your papers and get your details checked because for the first time any company is preparing to give preferential allotment to its policyholders.
Like some companies, when they give the preference to their shareholders. There is a practice of such preferential allotment to the employees. What will happen by giving preferential allotment to policyholders? A lot of people who are yet to invest in LIC IPO or what it means to be a LIC policyholder trust it. Maybe a new category there are a lot of people who haven't invested in the stock market yet.
They should start with LIC, this effort is being made, good efforts are not a bad thing, but the serious question of this time is that will bring LIC's share of the government. if it is too much then it will be very difficult for the government because It is going to be very difficult for the market to digest such a huge IPO.
Effect of LIC IPO in Indian stock market:
LIC is a big company and LIC has a lot of money. Second, the government has been using LIC to bring down the market according to its own, so far no one was going to ask questions, with the listing, the business of LIC will come in front of the public. It is necessary that the government should be very careful in fixing the price. You are in any greed, and keep its price a little higher, then the more chances are getting trapped.
And if the price is kept low, and investors are in profit after listing, then it can work to take the equity market to a new level in the country. If such a large number of investors will come, and they get a big profit, then it can be good news not only for LIC, also good for shareholders. And it can be good news for the stock market also in the whole country.
Good Informative
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