Life Insurance Corporation of India IPO – Schedule *(TENTATIVE)*
22nd April – Announcement of Price Band
26th April – Anchor Investors Allotment
27th April – Offer Opens
29th April – Offer Closes
04th May – Finalisation of Basis of Allotment
05th May – Unblocking of ASBA Accounts
06th May – Credit of Equity Shares to Depository Accounts
09th May – Commencement of Trading
Life Insurance Corporation of India IPO – Issue Information *(TENTATIVE)*
Issue Opens on: 27 April 2022
Issue Closes on: 29 April 2022
Issue Type: Book Built Issue IPO
Issue Size: 31,62,49,885 Shares
Face Value: Rs.10/- per Share
Issue Price: Rs.1,900 – Rs.2,000 Share *(TENTATIVE)*
Discount: 5% (for Employees & Policy Holders)
Market Lot: 7 Shares
Listing At: NSE, BSE
Equity Shares outstanding prior to the Issue = 6,32,49,97,701 Shares
Fresh Issue of NIL Shares @2,000/- = Rs. NIL Crs
Offer for Sale of 31,62,49,885 Shares @2,000/- = Rs.*62,775.60Crs
(*considering 5% discount for Employees & Policyholders)
Equity Shares outstanding after the Issue = 6,32,49,97,701 Shares
Category-wise Break up:
Anchor – 8,06,43,751 Shares = 16,128.74Crs. (@2,000/-)
QIB – 5,37,62,480 Shares = 10,752.50Crs. (@2,000/-)
NII – 4,03,21,860 Shares = 8064.37Crs. (@2,000/-)
RII – 9,40,84,341 Shares = 18.816.87Crs (Lot size: 7 = 1,34,40,620 Forms)
Employees – 1,58,12,494 Shares = 3,004.37Crs. (5% discount = @1,900/-)
PolicyHolders – 3,16,24,989 Shares = 6,080.75Crs. (5% discount = @1,900/-)
Total Issue – 31,62,49,885 Shares = 62,775.60Crs.
Subscription required for 1X
RII = 1,34,40,620 Forms
NII = 8,064.37 Crs.
Life Insurance Corporation of India IPO – Financial Information (Basis of Valuation)
The information is collated from the following documents:
1) DRHP = Draft Red Herring Prospectus Dated February 13, 2022 (652 pages)
EPS for FY18-19 >>> Rs 4.15 (Page #97 of DRHP)
EPS for FY19-20 >>> Rs.4.29 (Page #97 of DRHP)
EPS for FY20-21 >>> Rs.4.70 (Page #97 of DRHP)
EPS for H121-22 >>> Rs.2.38 (Page #97 of DRHP)
RoNW for FY18-19 >>> 322.25% (Page #98 of DRHP)
RoNW for FY19-20 >>> 317.14% (Page #98 of DRHP)
RoNW for FY20-21 >>> 45.65% (Page #98 of DRHP)
RoNW for H121-22 >>> 18.76% (Page #98 of DRHP)
NAV as on September 30, 2021 was Rs.12.68 (Page #98 of DRHP)
Listed Industry Peer Group (Page #99 of DRHP):
SBI Life Insurance Company,
HDFC Life Insurance Company,
ICICI Prudential Life Insurance Company
Life Insurance Corporation of India IPO – *Market’s Current Estimates of oversubscription*:
NII = 40KCrs. = ~4.96X
RII = 50L Forms = 0.37X Applic. wise (Firm Allotment of 7 shares per lot)
Interest cost *@7.00%p.a.* for 7days = *268.49 paise for 1X*
Thus, for NII the costing = 4.96 X 268.49 paise = Rs.13.32 per share (= GMP)
And, for RII the costing = 7 X 13.32 = Rs.93.22/- (= Subject2)
Life Insurance Corporation of India IPO – *GMP Estimated*
GMP 15 +/- 1
Kostak NIL
Subject2 @100/-
LIC IPO
Issue Price = 2.35 X Embedded Value (as of Sept’21)
Market Cap = 2.35 X 5,39,686 Crs = 12,68,262Crs
Rate per Share = MarketCap ÷ No. of Outstanding Shares = 12,68,262Crs ÷ 6,32,49,97,701 = 2,005/-
Fair Value = 3.00 X Embedded Value (as of Sept’21)
Market Cap = 3.00 X 5,39,686 Crs = 16,19,058 Crs
Rate per Share = MarketCap ÷ No. of Outstanding Shares = 16,19,058 Crs ÷ 6,32,49,97,701 = 2,560/-
*LIC IPO*
*Comparison with Peer Group* 13/April
HDFC Life | CMP = 565.05 | No. of Shares = 2,11,26,19,161 | MCap = 1,19,374Crs. | Embedded Value = 29,543Crs. | MCap / EV = *4.041*
SBI Life | CMP = 1,146.10 | No. of Shares = 1,00,03,70,562 | MCap = 1,14,652Crs. | Embedded Value = 35,290Crs. | MCap / EV = *3.249*
ICICI Life | CMP = 539.00 | No. of Shares = 1,43,73,06,101 | MCap = 77,471Crs. | Embedded Value = 30,203Crs. | MCap / EV = *2.565*
And,
*LIC IPO | Issue Price = 2,000 *(TENTATIVE)* | No. of Shares = 6,32,49,97,701 | MCap = 12,65,000Crs. | Embedded Value = 5,39,686Crs. | MCap / EV = 2.344*
Life Insurance Corporation of India when compared to SBI Life Insurance Company Limited …
On “MarketCap / Embedded Value” ratio basis …
Does it deserve to be lower or higher?