LIC IPO News
LIC is all set for its IPO which will emphatically raise the valuation of the company surpassing that of the Reliance industry.
- This shows the significant nature and importance of the IPO that is all set to hit the market. The IPO of LIC will be game-changing as it will help the government garner from Rs. 50,000 crore to Rs. 1 lakh crore for its divestment policy which is crucial for raising funds for the functioning of the government.
In fact, the sale of 5-10 percent government stake in the company will give the company better returns on its investment. This is due to the fact that independent directors and investors will be able to raise questions on economically viable decisions that will be lucrative and strategic for the growth and performance of the com
LIC’s embedded value as of September 30, 2021, has been estimated at 5.39 lakh crore. Currently, private insurance companies trade at a multiple of 3-4 times embedded value.
However, embedded value is only an estimation of value based on several assumptions, and the multiple attribute to an insurer could vary based on several qualitative factors.
Considering its size, and dominant position in the market with 66 percent market share in new business premium, its growth rate may not match up to some of the nimble-footed private insurers.
A range of embedded values multiple between 2-3.5 throws up a valuation for the corporation ranging from Rs 10.7 lakh crore to Rs 18.7 lakh crore. Based on the total equity capital of 632 crore shares, the issue size for a 5% offer for sale works out from Rs 53,500 crore to Rs 93,625 crore.
The per-share price thus works out from Rs 1693 to Rs 2962. Against this, the government’s average cost of acquisition of shares stood at Rs 0.16 as LIC went through a capital rejig ahead of the IPO.
LIC’s initial capital, when it was incorporated, was Rs 100 crore. Since LIC was a collective, and not envisaged as a public limited company, there were no shares allotted. To transform the corporation into a corporate structure with shareholders ahead of the public issue, the original capital of Rs 100 crore infused by the government during the inception of the corporation was converted into share capital by allotting shares of face value Rs 10 for an equivalent amount.
In September 2021, the corporation then allotted an additional 62.24 crore equity shares at the same face value against the free reserves outstanding in LIC’s book as of March 31, 2020.
Then again, another 560 crore equity shares of the same face value were allotted against the retained share of a surplus of the government of India for fiscal years 2020 and 2021. LIC’s total capital now stands at Rs 6,324 crore.
Cadila Healthcare Ltd on Monday said group firm Zydus Pharmaceuticals (USA) Inc has received final approval from the US health regulator to market its generic version of Roflumilast tablets in the strength of 500 mcg indicated to reduce the risk of chronic obstructive pulmonary disease (COPD) exacerbations.
Zydus, being one of the first applicants for Roflumilast Tablets, 500 mcg, is eligible for 180 days of shared generic drug exclusivity, Cadila Healthcare said in a regulatory filing.
LIC’s embedded value as of September 30, 2021, has been estimated at 5.39 lakh crore. Currently, private insurance companies trade at a multiple of 3-4 times embedded value.
However, embedded value is only an estimation of value based on several assumptions, and the multiple attribute to an insurer could vary based on several qualitative factors.
Considering its size, and dominant position in the market with 66 percent market share in new business premium, its growth rate may not match up to some of the nimble-footed private insurers.
A range of embedded values multiple between 2-3.5 throws up a valuation for the corporation ranging from Rs 10.7 lakh crore to Rs 18.7 lakh crore. Based on the total equity capital of 632 crore shares, the issue size for a 5% offer for sale works out from Rs 53,500 crore to Rs 93,625 crore.
In September 2021, the corporation then allotted an additional 62.24 crore equity shares at the same face value against the free reserves outstanding in LIC’s book as of March 31, 2020.
Then again, another 560 crore equity shares of the same face value were allotted against the retained share of a surplus of the government of India for fiscal years 2020 and 2021. LIC’s total capital now stands at Rs 6,324 crore.
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