"Opportunities are like sunrises. If you wait too long, you miss them." - William Arthur Ward
Life Insurance Corporation of India (LIC) is probably the best known company in India. It is also one the best known entities to invest in most of the state-owned firms in India. In that way, LIC is more than just another insurance company.
It is the market leader in insurance serving about 290 million policy holders. Over 245 insurance providers merged in 1956 to create the state-owned LIC.
It is also one of the biggest employers in India, having more than 110,000 employees in its payroll. The business model of LIC also has agents in several districts. The total number of agents under LIC's payroll were 11,48,811 (or 1.15 million agents) as of 2018-19 fiscal year.
What all these mean is that, if there is an insurance policy you need, LIC has the workforce and systems to sell it to you!
Indian government plans to sell 10% stake in LIC through this IPO where it plans to raise ₹80,000 crores (roughly $10.7 Billion). The company's validation is estimated to be ₹9,72,000 crores (roughly $130 Billion).
Hence, 10% might fetch closer to LIC's valuation which is about ₹97,200.
The cause of concern for any interested investor is the non- performing assets (NPA) which keep rising. With Covid-19 pandemic, NPAs keep increasing.
Be wary, do your due diligence. The IPO might happen this year according to the government's plan. Weak economy might push it further in to next year.