Because the historic occasion of the Life Insurance coverage Company of India (LIC) IPO is nearing, market curiosity within the difficulty has been growing. LIC enjoys the dominant place within the insurance coverage sector and is prone to discover a place amongst India’s most valued corporations, with the general public difficulty prone to make a compelling proposition.
In keeping with the draft preliminary public providing (IPO) paperwork filed with SEBI, the federal government has proposed to divest 5% of LIC’s fairness by way of the provide on the market (OFS).
Essentially the most formidable determine, nevertheless, pertains to LIC’s strategic function within the Indian fairness market, even earlier than its inventory goes public. On February 14, 2022, the full market cap of 5,249 shares listed on BSE was ₹255.4 lakh crore, of this LIC owned 3.7% ( ₹9.4 lakh crore) by way of its stake in varied corporations, as per information by brokerage Ventura Securities.
“It performs the function of a sheet anchor within the shareholding of many listed corporations and works as a robust counter balancing weight towards FPI (Overseas Portfolio Buyers) holdings. For example, LIC held 16.23% stake in ITC as on December 31, 2021, whereas FPI buyers held a 9.99% stake. That is essential contemplating the promoter doesn’t maintain any stake within the firm,” the brokerage’s analysis report added.
The key holdings of insurance coverage behemoth contains India’s high corporations equivalent to Reliance Industries wherein its holds about 6.13% stake as of December 2021, Tata Consultancy Providers (TCS), Infosys, State Financial institution of India (SBI), ITC, ICICI Financial institution, amongst others.
However, ITC, Hindustan Copper, NMDC, MTNL, Larsen & Toubro (L&T), Hindustan Aeronautics (HAL), Oil India are among the corporations wherein LIC holds greater than 10% stake.
Additional, a complete host of corporations, equivalent to ACC, Ambuja Cements, India Cements, Bharat Bijlee, CDSL, DCM Shriram, Grasim, Mahindra and Mahindra, Nationwide Inventory Trade, Tata Metal and Tata Energy amongst others, have LIC nominated administrators on their boards.
“Covid-19 was a stress check for Indian life insurance coverage corporations. Given their regular efficiency even throughout such a difficult section, they’re prone to be on a agency progress path going ahead. And LIC being the market chief stands the perfect probability to seize the long run progress alternatives,” Ventura Securities be aware added.
Supply: Live Mint