LIC Looks To File Draft Papers For IPO By Third Week Of January 2022

India’s largest insurer LIC is expected to file its IPO's draft prospectus with SEBI by the third week of January 2022, as per one of the interactions of LIC’s top officials with global investors.

Ever since the Finance Minister's announcement in last year's Budget (2021) about the government's intended disinvestment in LIC, the officials at the Finance Ministry have maintained their stance on LIC becoming a listed entity before fiscal 2022 ends, i.e. before the end of this financial year on 31st March 2022.?

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LIC’s Focus In The IPO Run Up

As per the sources that revealed the other details and information shared by LIC officials with those investors, LIC aims to increase focus on non-participating products such as ULIPS, pension, annuity, and health insurance products. This would be a part of its efforts to diversify its product mix, besides aiming to boost the sales of existing non-participating products and even launching new non-participating products.

Amongst the other aims of LIC in the run-up to the huge IPO, the officials mentioned to the investors how LIC wants to increase upselling as well as cross-selling to individual customers, increase the productivity of its intermediaries and increase the average ticket size of the products it sells.

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LIC’s Growth Plans

In the earlier presentations by LIC’s officials, they had told the prospective investors in the LIC IPO how the insurance company wants to leverage its digital strategy to grow its business. A part of its growth plans includes the recruitment of more millennial agents to keep pace with the changing demographic pattern of India.

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Pushing For 'Bancassurance'

Also, LIC officials also told investors that the insurance company wants to increase its market share of the ‘bancassurance’ channel, as it's in the process of tying up with more and more partners. LIC is also pushing for boosting digital adoption for its bancassurance partners to improve productivity.

For the uninitiated, bancassurance is an arrangement between a bank and an insurance company, which allows the insurance company to sell its products to the bank's client base.

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The Government’s Aim Behind LIC IPO

Through its stake sale in LIC, the government aims to fulfill its disinvestment target of ?1.75-lakh crore in the current fiscal year of 2021-22. The government plans to divest 5%-10% equity in LIC, which is likely to fetch them around ? 80,000 crore-?1 lakh crore through the share sale.

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