Should you invest in the LIC IPO?

Check out the Positives & Negatives
 

LIC IPO: The subscription period for the IPO of India’s largest insurer, Life Insurance Corporation (LIC), began on May 4th and will end on May 9th. While investors scrutinise LIC’s financials, the grey market is also supportive of the public offering. LIC IPO GMP (grey market premium) today is 85, up roughly 8% from the LIC IPO pricing band of 902 to 949 per equity share. Analysts, like the grey market, think the LIC IPO is a good long-term investment.

If you want more infomation regarding LIC IPO by an expert personally contact us SKW INVESTMENT ADIVSER – +917406785850.

Top 5 Positive reasons to apply:

1] Buy LIC IPO on reasonable valuations Kanika Agarrwal, co-founder and CIO of Upside AI, said: “The LIC IPO is priced well. Its embedded value of roughly 5.4 lakh crore is reasonable at 1.1x as the government lowered appraisal by 50% to 6 lakh crore. 2.5-4x for private insurers.”

2] “LIC was India’s largest asset manager as of 30 September 2021, with $39.55 trillion in assets under management, more than 3.3 times the combined AUM of all private life insurers and 1.1 times the AUM of the Indian mutual fund industry. LIC’s listed stock holdings accounted for roughly 4% of the NSE’s market capitalization “”Anand Rathi Shares & Stock Brokers’ Head of Equity Research (Fundamental) Narendra Solanki.

3] Market experts predict LIC will be a dividend paying stock, which is another method to profit from one’s investment.

“Aside from regular income, dividend-paying stocks are often in defensive sectors that can withstand economic downturns. The Government of India owns and controls the Life Insurance Corporation of

India. After the government of India reduced its stake in the company, investors can expect a healthy dividend once it is listed “Anand Rathi’s Narendra Solanki.

4] LIC’s market dominance despite fierce competition from commercial insurers this record low under penetration is projected to promote additional growth for the existing market leader Life Insurance Corporation of India. A commission-to-premium ratio of 5.5% compared to 4.4% for the top five private players, according to Anand Rathi’s Narendra Solanki.

5] LIC is synonymous with insurance in India and has a huge brand value advantage.

“LIC IPO subscribers must be aware that the business of insurance is long term in nature; hence we propose this issue for long term only and policyholders must embrace this chance because of the discount granted,” said Sumit, Head of Research at SKW INVESTMENT ADVISER.

However, the government did not disclose in the DRHP the LIC’s market value or the discount granted to policyholders or employees in the public offering.

If you want more infomation regarding LIC IPO by an expert personally contact us SKW INVESTMENT ADIVSER – +917406785850.

Top 5 Negative reasons not to apply:

“LIC must follow the government’s norms and regulations. This limits the company’s expansion. “According to the IIFL analysis, the corporation has invested in many loss-making companies due to government rules.

LIC’s old techniques limit its possibilities of catering to the young urban populace. They cannot “acquire new technology and distribution channels, “added.

Competition: In the first ten months of FY22, LIC lost 5% market share, or 500 basis points, to the private life insurance industry. Private enterprises give superior service than LICs, according to a recent IIFL Securities report.

Pandemic IPO: The COVID-19 pandemic could harm sales agents’ abilities, increase costs due to new laws and regulations, harm investment portfolios, reduce operational efficiency, and/or increase business risks.

Persistency: Renewing policyholders are counted as part of the ratio, which indicates both sales quality and future growth. The DRHP says LIC persistency percentages fell by March 31, 2020. Assumptions may not come true, If actual claims and other parameters differ from the assumptions used to price and reserve products, it could negatively impact the company’s business, financial condition, and results of operations, according to the DRHP.

REPO Rate Modification: Interest rate changes can have a significant impact on a company’s profitability.

If you want more infomation regarding LIC IPO by an expert personally contact us SKW INVESTMENT ADIVSER – +917406785850.

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