LIC

 

 

 

The wait for Life Insurance of India IPO is over today. LIC’s IPO has opened today and any investor who wants to subscribe in the IPO can do so. The thing to keep in mind here is that till May 9, you have a chance to apply in the IPO. Those interested in investing in LIC are doing research on the company’s business, fundamentals and analytics and trying to understand whether investing in LIC can be a profitable deal. Experts believe that investing in LIC can be a profitable deal in the long run. Through this article, we will tell you whether you should invest in LIC or not, but you have to take the final decision on investment at your own discretion.

Why apply for IPO

The valuation of the company has been kept very attractive. People are being given a chance to get a stake in the company at a very low price. The valuation of the company has been reduced by about 50 percent by the government, it has been shown to be 6 lakh crores, which is about 2.5 to 4 times less than the private companies, so it is a very attractive valuation for the investors.

 

LIC is the country’s largest company among insurance companies, LIC’s share in the insurance sector is about 65 percent, that is, LIC is a much bigger company than all private companies. On one hand, while other insurance companies have only about 35 percent of the market, LIC alone has about 65 percent of the market. Therefore, it is believed that with the investment of investors, the company can become bigger and people will get direct benefit from it. LIC has the highest premium commission at 5.5 per cent, while it is 4.4% among the other four largest companies in the country.

 

why not buy

Although LIC is the country’s largest insurance company, the company’s market has decreased by about 7 percent in the last 8 years. While LIC’s market share was around 72 per cent in 2014, its share has come down to 65 per cent in the last eight years. Which is a matter of great concern for the company.

 

 

LIC does not encourage online policy buying as compared to other private companies, which is a major reason why its agents bring maximum business to the company. On the other hand, other private companies do a lot of promotion to buy the policy through different online platforms. The big pressure with the company is that it cannot anger its agents, which can prove to be harmful for the company in the long run.

LIC distributes a major part of its earnings among its investors and agents, which is not profitable for the shareholders. Apart from this, the interference of the government in LIC also makes it difficult for the company. Many times the company has to invest in such places which are not good for the company’s business. An example of this is the investment in IDBI Bank.

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