I am big believer of insurance sector. Already holding Sbi life, HDFC life and Icici Lombard. Though lic loosing market share consistently I will bet on it a small portion of portfolio. For me valuation is very attractive. Sbi made good money for me because I added alot on lower price, I will try same here. Of course all this is for long term.in Current conditions it may list lower. I will add more on dips.
government of india stock. though gmp is down, i don't think the stock will list at discount. however it continues to be a high risk investment & dividends likely to be low & growth slow. if however the retail public adopt lic as a brand ambassador like they took ruchi soya in, investors will be very lucky. those with high risk appetite may gamble, i'm applying in retail for 2L. will modify my plan after reading chittorgarh experts strategie(s) on the last day of issue
367. Arca| Link| Bookmark|
April 27, 2022 8:45:30 AM
(1000+ Posts, 500+ Likes)
Why applying 14 lots in lic is beneficial and not in any other ipo? Reason Nykaa had almost 31 lakh applications Even if we get that amount of applications or more like 35-40 lakhs. I assume after considering the green shoe option also people will get 50-100% of the lots they applied For example. 35 lakhs people applied and total forms after considering green shoe (46lakhs + 9/21% = 65lakhs applications).
Assuming 3 lakhs (people who know about allotment process) 14 lots average =42 lakhs And another 32 lakhs people each 1 lot 32 lakh lots
Each one lot will be alloted to 35 lakh people Balance 30lak lots /3lakh people =10 additional lots
So those who applied 14 lots will be getting atleast 11 lots. Worst case if 5 lakhs people applied 14 lots 7 lots they will get
Above assumption is based on the factor , ipo has good gmp and market is stable.
366.2. arunARUN| Link| Bookmark|
April 27, 2022 8:42:56 AM
IPO Guru (1900+ Posts, 1600+ Likes)
Yes. Why question in first place given policy holder and retail are two different categories If you are an employee you can also apply under that category
The Indian Embedded Value (IEV) of LIC as at 31 March 2020 and 31 March 2021 is INR 46,497 crore and INR 95,605 crore.
IEV of LIC is approx INR One Lakh Crore.
NAV of LIC is INR 12.68 only as 30Sept2021.
EPS is INR 4.76 as 30Sept2021.
P/E is INR 949/4.76 = 199 Years.
Very Hard to decide.
364.1. arunARUN| Link| Bookmark|
April 27, 2022 8:40:25 AM
IPO Guru (1900+ Posts, 1600+ Likes)
Your formula of price earning is not applicable as insurance company also has contracted policies ensuring cash flow without selling a new policy. Can you imagine same for any other business i.e. getting cash flow on past contracts
Keep apart all the bad publicity on LIC. In my opinion this is going to be oversubscribed. No chances of full and firm allotment as suggested by many media expert.
Ganesh Ji, do you think 49 lakh retail applications will be oversubscribed as third party ASBA already blocked in most of bank . Market condition is also not in favour for new Investor. I have never seen more than 45 lakh retailer in highly subscribed IPO from last 4 years.
363.2. K.Atar| Link| Bookmark|
April 26, 2022 9:26:51 PM
IPO Guru (1000+ Posts, 700+ Likes)
Hotpacker ji, Hopefully with discounts in both retail and policy holder category, applications in multiple lots will be a norm in this IPO. Even I am putting two 2 lakh applications in policy holders category plus retail category application in same name.
363.4. Ankur Goel| Link| Bookmark|
April 26, 2022 11:51:07 PM
IPO Guru (1100+ Posts, 500+ Likes)
I have multiple accounts but I will apply from only one account. There are many investors like me who apply from multiple accounts but they will apply in 1-2 accounts only. So number of retail applications will be less in LIC as compared to highly subscribed IPOs.
The price band for the initial public offering of Life Insurance Corporation of India (LIC) has been set at Rs 902 to Rs 949, with a discount of Rs 60 for policyholders, CNBC TV18 learnt from government sources on April 26.
For retail and employees, the discount will be of Rs 40, the persons privy to the development told the news channel.
Govt Sources on #LICIPO | Price band 902/- to 949/-
Discount for retail and employees -Rs 45/-
Discount for policy holders- Rs 60/
356. arunARUN| Link| Bookmark|
April 26, 2022 4:27:21 PM
IPO Guru (1900+ Posts, 1600+ Likes)
Formula for working out market value does not work as ratio of market cap to embeded value but more as simple way to capture value of new business Market cap of Insurance company equals Embeded value plus VNB( value of new business) multiplied by number of years you feel comfortable Given low value of new business for LIC, low ratio of market cap to embded value is justified
Removing Third party ASBA from major banks, just before LIC IPO. Bad for this IPO or good for reatail customers? ?
354.1. arunARUN| Link| Bookmark|
April 26, 2022 4:14:02 PM
IPO Guru (1900+ Posts, 1600+ Likes)
It should have been done long time ago
353. arunARUN| Link| Bookmark|
April 26, 2022 4:13:16 PM
IPO Guru (1900+ Posts, 1600+ Likes)
At 950 or around 1.1 1.2 market price to embeded value per share LIC issue looks attractive However listing gains are doubtful as IRFC was also attractive on fundamental parameters but faced market problems due to high liquidity, poor understanding of business model of the company
352. Jainvipul| Link| Bookmark|
April 26, 2022 2:47:53 PM
Top Contributor (400+ Posts, 300+ Likes)
Dear eagleye Can you comparison with EPS p/b with all life insurance so more helpful to all chittorgarh readers please.
352.1. arunARUN| Link| Bookmark|
April 26, 2022 4:10:55 PM
IPO Guru (1900+ Posts, 1600+ Likes)
Given historical issues LIC P/B ratio has no meaning as for long time capital was Rs 5 crore
351. Eagleye| Link| Bookmark|
April 26, 2022 1:16:27 PM
IPO Guru (6600+ Posts, 21900+ Likes)
*LIC IPO*
*Comparison with Peer Group* 25/April
HDFC Life | CMP = 542.00 | No. of Shares = 2,11,26,19,161 | MCap = 1,14,504Crs. | Embedded Value = 29,543Crs. | MCap / EV = *3.876*
SBI Life | CMP = 1,094.80 | No. of Shares = 1,00,03,70,562 | MCap = 1,09,521Crs. | Embedded Value = 35,290Crs. | MCap / EV = *3.103*
ICICI Life | CMP = 518.40 | No. of Shares = 1,43,73,10,661 | MCap = 74,510Crs. | Embedded Value = 31,625Crs. | MCap / EV = *2.356*
And, *LIC IPO | Issue Price = 950 *(TENTATIVE)* | No. of Shares = 6,32,49,97,701 | MCap = 6,00,875Crs. | Embedded Value = 5,39,686Crs. | MCap / EV = 1.113*