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This will be the biggest IPO in India, ever, and upon listing it will become one of the largest, if not the largest, listed companies in India.
It’s still early days for the listing, and as always there is a high likelihood of missing the listing deadline. Nonetheless, the ball has been set rolling and thus, the company will be listed sooner or later.
Life Insurance Corporation (LIC) was established in 1956 via the Life Insurance Corporation Act, 1956. It was a result of nationalisation of life insurance business in India by transferring all such business to LIC. As of FY19, it had a market share of 42% in individual new business premium and a market share of 66% of total first year premium.
In this note, I’ll do a quick comparison of LIC with some of its listed private sector peers to arrive at some very preliminary valuation numbers. I’ll also highlight some of the hurdles that the deal will have to cross.
Life Insurance Corporation of India Pre-IPO - Early take on India’s largest IPO
On 1st of Feb 2020, the Indian finance minister announced the government of India’s (GOI’s) intention to list LIC before the end of the next financial year, i.e. before Mar 2021.This will be the biggest IPO in India, ever, and upon listing it will become one of the largest, if not the largest, listed companies in India.
It’s still early days for the listing, and as always there is a high likelihood of missing the listing deadline. Nonetheless, the ball has been set rolling and thus, the company will be listed sooner or later.
Life Insurance Corporation (LIC) was established in 1956 via the Life Insurance Corporation Act, 1956. It was a result of nationalisation of life insurance business in India by transferring all such business to LIC. As of FY19, it had a market share of 42% in individual new business premium and a market share of 66% of total first year premium.
In this note, I’ll do a quick comparison of LIC with some of its listed private sector peers to arrive at some very preliminary valuation numbers. I’ll also highlight some of the hurdles that the deal will have to cross.
Underlying
Life Insurance Corp of India
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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