LIC IPO: Interesting analysis - Rs 10 out of every Rs 100 saved by Indian households each year goes to LIC

Setting the stage for the country's biggest ever public offering, Life Insurance Corporation (LIC) recently filed draft papers with capital market regulator Sebi for the sale of 5 per cent stake by the government.

The initial public offering of over 31.6 crore shares or 5 per cent government stake is likely to hit the D-street in March and employees and policy holders of the insurance behemoth would get a discount over the floor price.

UBS Securities India Private Ltd on LIC IPO

Amid all the developments pertaining to LIC IPO, UBS Securities India Private Ltd. in its report has mentioned the - Importance of LIC for the household.

UBS in its report says, "LIC's Sanskrit tagline, taken from the holy Gita, translates to "I carry the responsibility of your well-being". In our analysis, nearly Rs 10 out of every Rs 100 saved by the Indian
household each year goes to LIC, making it larger than even the perceived staple of household savings—a deposit with SBI (we notice the gap is narrowing)."

"Media reports suggest the government is looking to tap into LIC's large customer base (280m policies,
about one per family in India) to generate buying interest in the IPO," UBS Securities India Private Ltd said in its report.

LIC IPO

- The IPO is offer for sale (OFS) by the Government of India and no fresh issue of shares by Life Insurance Corporation (LIC).

- The Government holds 100 per cent stake or over 632.49 crore shares in LIC.

- The face value of shares is Rs 10 apiece.