LIC IPO: Key Attractions With an Unique Appeal to Investors

The Life Insurance Corporation of India (LIC) has a long legacy for every Indian. LIC has the largest network of life insurance agents, accounting for more than half of all individual agents in India.

India is a largely under-insured country, although, after the COVID-19 pandemic, people have started taking insurance more seriously. This creates an opportunity for the sector to grow. India has the highest protection gap among Asia-Pacific (APAC) countries, at more than 80 per cent. Given our size and under-penetration, it presents a good opportunity to continue generating a minimum of 15 per cent new business profit (NBP) for a long time.

Soul Objectives of Buyings LIC IPO: Is it Listing Gains or Long-Term Wealth Creation?

Put aside the urge to make listing gains for a moment. LIC IPO is one of India’s most trusted brands. Trust is the most important factor in purchasing insurance, and it carries a lot more weight when it comes from a government company. So apply for the shares, use multiple accounts, and you'll be fine. This is subject to your risk profile and assessment.

Be prepared to invest more after the listing. How much to invest in the shares after listing depends on a number of factors. LIC has its own set of strengths and weaknesses.

LICs will sell shares worth Rs 20,557 crore in a price range of Rs 902-949. Existing policyholders will receive a discount of Rs 60 per share; retail investors and employees will get a discount of Rs 45 per share. To secure an allotment of shares, investors should apply for the stock at the higher price band. The discount provides investors a safety net.

Understand what works and what may continue to work in LIC's favour.

Ultimately the investor has to decide the sole objective of investing in LIC’s IPO. Options are multiple but mostly, it is either for short-term which is normally opted by fast track investors and the option of long term investment usually opted for by long haul investors.  Many first time investors often get confused in making the right choices but for them, there is ample information available on the Internet to clarify and get clarity.

Ref: Moneycontrol.com