LIC IPO DRHP ~ QUICK FIRST TAKE
Computed Price Range of Rs 2000 to Rs 2200 puts it in TOP 3 Market Cap Companies
Life Insurance Corporation of India (LIC) has just filed its 652 Pages Draft Red Herring Prospectus (DRHP) with SEBI today, Sunday, February 13,2022. It is on track for an IPO in March 2022
Our Quick First Take is as below :
| Equity | Rs 6325 Crs comprising of 6,324,997,701 Equity Shares of face Value Rs 10 owned 100% by Government of India |
| IPO Offer For Sale by Govt | 316,245,889 Equity Shares comprising 5% of the Equity |
| Special Quota | LIC Policy Holders 10 % : Employees 5% ~ may offer both at a discount on IPO Price |
| LIC Embedded Value | Rs 5,39,686 crs as on September 30,2021 |
| NAV/Share | Rs 12.68 as on September 30,2021 based on relevant Networth of Rs 8020 crs |
| EPS | Rs 2.38 as on September 30,2021 and Rs 4.70 based on March 2021 Earnings after considering enhanced Equity Capital after Bonus Issues on September 8,2021 |
Computed IPO Price Range is Rs 2000 to Rs 2100
We have worked out an IPO Price Range of Rs 2000 to Rs 2200
This is based on the above offer and the revised FY 22 Disinvestment of Rs 78000 crs of which Rs 12000 crs has been achieved. Thus, implying LIC IPO size should be @ Rs 66000 crs
At Rs 2200 the Market Capitalisation of LIC is Rs 13,91,500 crs (US $ 186 b taking $=Rs 75)) putting it in the TOP 3 Listed Companies in India .Reliance Industries is the leader at Rs 16,07,858 crs (US $ 214 b) with TCS second currently at Rs 13,67,021 crs (US $ 182 b) as on Friday closing February 11,2022
Total BSE Market Capitalisation at closing on Friday, February 11,2022 was Rs 2,63,89,886 crs ( US $ 3.5 Trillion). Interestingly LIC value of its Investments in Listed Equity is @ US 140 b or near 4% of the Market Cap
Being the Market Leader, LIC Valuation is obviously much higher than Peer Group on relative Valuations of PE and PBV and is a near 2.6 Multiple of its Embedded Value
Interesting Extracts from the DRHP form part of this SCRIP STANDPOINT in the pages that follow
Cheers,
Gaurav Parikh, Managing Director
[email protected] +9820162597
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