IPO News: LIC's IPO costlier than Adani Wilmar, invest or not?
The official announcement of LIC's IPO is finally out. LIC's price band is Rs. 910 to 949 So this is one of the most expensive issues in the stock market recently. The company is worth more than Adani Wilmar, Dixon Tech and IRCTC.
The long awaited LIC IPO has been officially announced. LIC's price band is Rs. 910 to 949 So this is one of the most expensive issues in the stock market recently. The company said that its earnings per share (EPS) in FY21 was Rs 4.70. It was Rs 4.29 in FY 2020 and Rs 4.15 in 2019. The upper limit of the issue is Rs. Looking at 949 its value is 202 times its earnings
This is probably the costliest issue of all the recent IPOs. The company is worth more than Adani Wilmar, Dixon Tech and IRCTC. If LIC's IPO is successful, it will become the most expensive state-owned company.
Currently, the most expensive state-owned companies are HMT (TTM PE 176), India Tourism Development Corporation (174), IRCTC (110), National Fertilizer (51), Container Corporation of India (48) and Hindustan Copper.
LIC will be the most expensive as compared to the competitors. LIC costs twice as much as the costliest insurance stocks today. As per the data provided by LIC, HDFC Life trades at 82 times, ICICI Prudential Life Insurance Company at 79 times and SBI Life Insurance Company at 78 times. The average PE ratio of the insurance industry is 80
Most analysts are of the view that LIC should be invested in despite its high valuations. LIC has a dominant position in the market so it gets premium. Aastha Jain of Haim Securities said the issue has an embedded value of 1.1 times its current size which is fair value.
Should I invest in LIC IPO or not?
B Gopkumar, MD & CEO, Axis Securities said that the market volatility in the near future may affect the performance of LIC stock but in the long run we are looking forward to the stock.
We asked a lot of people, everyone has to say that there is no risk in investing in this. There may be some softening due to Russia-Ukraine war but if you want to invest for long term then it can benefit you. But before subscribing to IPO, do take the advice of your financial advisor.
10 useful things about LIC IPO
1- LIC IPO GMP - The IPO was trading in the gray market with a premium of 25%. On Wednesday, it has increased to Rs 48. That is, it is expected that LIC IPO can be listed at Rs 997 (Rs 949 + Rs 48). That is, at a price 5% more than the issue price.
2- LIC IPO Price- Government of India has fixed the price band of LIC IPO from Rs 902 to Rs 949 per share.
3- LIC IPO Subscription Date - LIC's IPO will be open from May 4 to May 9, 2022.
4- Exemption to policy holders - Anyone who has a policy of LIC will get a discount of Rs 60 per share from the government. Let us tell you, this benefit will be available only to those policy holders who have purchased the policy before 13th April 2022.
5- Exemption to employees also- If you are an employee of LIC then you will get a discount of Rs 45 per share.
6- What is the size of LIC IPO - The government aims to raise Rs 21,008 crore under the offer for sale.
7- What is the lot size of IPO - The lot size of LIC IPO has been kept for 15 shares.
8- LIC IPO Limit- Any investor can apply for a maximum of 14 and at least one lot.
9- When will the listing- LIC will be listed on NSE and BSE on May 17, 2022.
10 - LIC IPO Registrar- Kfin Technologies Limited will be the LIC IPO Official Registrar
