Life Insurance Corporation of India IPO – Schedule *(TENTATIVE)*
Earliest
08th March – Announcement of Price Band
10th March – Anchor Investors Allotment
11th March – Offer Opens
15th March – Offer Closes
21st March – Finalisation of Basis of Allotment
22nd March – Unblocking of ASBA Accounts
23rd March – Credit of Equity Shares to Depository Accounts
24th March – Commencement of Trading
Latest
15th March – Announcement of Price Band
17th March – Anchor Investors Allotment
21st March – Offer Opens
23rd March – Offer Closes
28th March – Finalisation of Basis of Allotment
29th March – Unblocking of ASBA Accounts
30th March – Credit of Equity Shares to Depository Accounts
31st March – Commencement of Trading
Life Insurance Corporation of India IPO – Issue Information *(TENTATIVE)*
Issue Opens on: 11 March 2022
Issue Closes on: 15 March 2022
Issue Type: Book Built Issue IPO
Issue Size: 31,62,49,885 Shares
Face Value: Rs.10/- per Share
Issue Price: Rs.1,800 – Rs.1,900 Share
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 @1,900/- = Rs. NIL Crs
Offer for Sale of 31,62,49,885 Shares @1,900/- = Rs.*59,613.10Crs
(*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 = 15322.31Crs. (@1,900/-)
QIB – 5,37,62,480 Shares = 10,214.87Crs. (@1,900/-)
NII – 4,03,21,860 Shares = 7,661.15Crs. (@1,900/-)
RII – 9,40,84,341 Shares = 17,876.02Crs (Lot size: 7 = 1,34,40,620 Forms)
Employees – 1,58,12,494 Shares = 2,846.25Crs. (5% discount = @1,800/-)
PolicyHolders – 3,16,24,989 Shares = 5,692.50Crs. (5% discount = @1,800/-)
Total Issue – 31,62,49,885 Shares = 59,613.10Crs.
Subscription required for 1X
RII = 1,34,40,620 Forms
NII = 7,661.15 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. = ~5.22X
RII = 50L Forms = 0.37X Applic. wise (Firm Allotment of 7 shares per lot)
Interest cost *@7.00%p.a.* for 7days = *255.07 paise for 1X*
Thus, for NII the costing = 5.22 X 255.07 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 = 2.25 X Embedded Value (as of Sept’21)
Market Cap = 2.25 X 5,39,686 Crs = 12,14,293.50 Crs
Rate per Share = MarketCap ÷ No. of Outstanding Shares = 12,14,293.50 Crs ÷ 6,32,49,97,701 = 1,920/-
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* 25/February
HDFC Life | CMP = 539.00 | No. of Shares = 2,11,18,13,255 | MCap = 1,13,827Crs. | Embedded Value = 29,543Crs. | MCap / EV = *3.853*
SBI Life | CMP = 1,054.40 | No. of Shares = 1,00,02,83,298 | MCap = 1,05,470Crs. | Embedded Value = 35,290Crs. | MCap / EV = *2.989*
ICICI Life | CMP = 477.00 | No. of Shares = 1,43,73,01,101 | MCap = 68,559Crs. | Embedded Value = 30,203Crs. | MCap / EV = *2.270*
And,
*LIC IPO | Issue Price = 1,900 (Tentative) | No. of Shares = 6,32,49,97,701 | MCap = 12,01,750Crs. | Embedded Value = 5,39,686Crs. | MCap / EV = 2.227*
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?