The country’s largest initial public offering is about to take place. Life Insurance Corporation of India (LIC) is expected to present it on March 11, according to a recent report. According to sources quoted in the report, it will open for anchor investors on March 11 and for other investors two days later. It is expected to receive regulatory approval in the first week of March, according to the company. On the one hand, the company has suffered a major setback as it prepares for its initial public offering (IPO). In fact, there has been a significant drop in LIC policy sales.
Sales of insurance policies are declining.
According to documents submitted by LIC to the market regulator SEBI, LIC’s policy sales have also decreased significantly. Individual and group insurance sales fell 16.76 percent to 6.24 crore in FY 2019-20, compared to 7.5 crore in FY 2018-19. At the same time, it decreased by 15.84 percent in the fiscal year 2020-21, to 5.25 crores. Due to the lockdown, sales of individual policies fell 22.66 percent to 63.5 lakh in the fourth quarter of 2019-20, compared to 82.1 lakh in the same period a year ago, according to company data. In the first quarters of 2020-21 and 2021-22, it fell by 46.20 percent to 19.1 lakh and then by 34.93 percent to 23.1 lakh.
The company’s financial burden
While the company lost money due to a decrease in policy sales, the financial burden on the insurance company has steadily increased in the case of death insurance payments during the Corona period. According to a report, the company’s total number of individual and group policies has decreased as a result of the Kovid-19 pandemic. Death insurance claims, on the other hand, have increased dramatically. According to this, death insurance claims for the financial years 2019, 2020, and 2021 totaled Rs 17,128.84 crore, Rs 17,527.98 crore, and Rs 23,926.89 crore, respectively. For the six months ending September 30, 2021, a total of 21,734.15 crore was paid.
75000 crores in debt
The country’s largest insurance company owes the Income Tax Department about Rs 75,000 crore and is preparing for an IPO (Initial Public Offering). The unique aspect is that the Life Insurance Corporation of India (LIC) does not want to use its funds to settle tax debts. There are 63 pending cases involving direct and indirect taxes on LIC totaling Rs 74,894.6 crore, according to documents submitted to market regulator SEBI for the IPO. The insurance company owes Rs 72,762.3 crore in 37 direct tax cases and Rs 2,132.3 crore in 26 indirect tax cases, which are still outstanding.
Unclaimed money of Rs. 21,500 crore
Let us inform you that, according to LIC’s information, it has Rs 21,500 crore in unclaimed policyholders until September 2021. That is to say, no one has claimed them. This indicates that either these policyholders have passed away or that their families are unaware of their existence. From Rs 13,842 crore in March 2019 to Rs 18,495 crore in March 2021 and Rs 16,052 crore in March 2020.
IPO with a total offer for sale
LIC’s initial public offering (IPO) will be the largest to date. The issue of LIC will be purely offer for sale, according to the DRAP submitted to SEBI. The government will issue 31.6 crore shares as part of its 5% stake in the company. According to the report, the company’s embedded value is estimated to be Rs 5.4 lakh crore. Normally, an insurance company’s market cap is four times this amount. According to this, LIC’s market value will be $ 288 billion, or about Rs 22 lakh crore, making it the country’s most valuable company.
This fantastic facility was provided by LIC.
Many people’s LIC policies are cancelled due to non-payment of premiums on time or for any other reason. On behalf of the company, it has been stated that policies that have been closed for five years can be reactivated by paying a lower fee. Policyholders whose policies have been discontinued, according to the report, may be eligible to apply for an IPO through the reservation portion. According to the documents, all such policyholders are eligible to invest under a reservation for IPOs that have not been removed from LIC’s records due to the policyholder’s maturity, surrender, or death.
