LIC manages assets worth Rs 39 lakh crore, or more than the entire mutual fund industry.
According to a note from GEPL Capital in the LIC IPO, LIC invests these funds across stocks and bonds. They own 4 per cent of all listed stocks in India and more government bonds than the RBI.
The note states that LIC is India’s leading insurance company and GWP’s fifth largest global insurer.
The note in the challenge states that LIC’s new policy growth rate is bad As they continue to lose market share to private insurers, especially in urban areas.
In addition, insurance plus investment product margins are low. It is very difficult to price LIC because the business model is not like any other company. LIC raises money in advance And then promises to compensate policyholders at a later stage. The premium they collect (partial insurance and partial investment) cannot be recognized as revenue.
The embedded value of LIC is Rs 5,39,686 crore and the underlying market capitalization of its issue post is Rs 6,00,242 crore which is 11.2 per cent premium on its IEV.
The note states, “The MAC to EV ratio for its listed counterparts ranges from 1.5x to 2.5x, so we believe LIC’s majestic size has been reasonably evaluated.”
According to the data, its business is largely driven by an agent-based model (90 percent plus), so boarding its network will require a larger digital platform for further growth.
“However, at a PAT of Rs. As a result, the income will be multiple cool-off.
“With its impressive network and the expected double-digit growth, the industry has made a profitable investment in LIC IPOs in compliance with attractive peer-to-peer valuations,” the note said.
Latest business news