Stock market: LIC may become country’s largest company after listing, valuation of 10 lakh crores estimated

  • The Finance Minister said in the budget – the government will bring an IPO to sell some stake of LIC.
  • LIC is the largest life insurance company in the country, with 100% stake in the government.
  • Analysts expect LIC to be India’s Saudi Aramco.

After listing in the stock market, LIC may overtake Reliance to become the largest listed company in the country. Analysts estimate LIC to be worth Rs 8-10 lakh crore. Currently, Reliance is the largest company in the country with a market cap of 8 lakh 77 thousand crores. TCS with a market cap of 8 lakh 12 thousand crore rupees is second. Finance Minister Nirmala Sitharaman announced in the budget on Saturday that the government will bring an IPO to sell some of its stake in LIC. However, it did not say how many shares would be sold.

If 5% shares are sold, then the government can get 50 thousand crores

The government holds 100% stake in LIC. Jimco Modi, CEO of SAMCO Securities, says that if the valuation of LIC is Rs 10 lakh crore, even if 5% shares are sold, the government will get Rs 50,000 crore. This will also help in reducing the fiscal deficit and meeting the disinvestment target. Equity 99’s business head Rahul Sharma expects investors to trust LIC’s IPO, which will give good returns.

71% share of LIC in Insurance market

The 60-year-old LIC is the largest insurance company in the country. It had a 76.28% market share as of 30 November 2019 in terms of policy numbers. The first year premium category had 71% share. In the last financial year, the company’s surplus increased by 10% to reach Rs 53 thousand 214 crore for the first time. The company gave a dividend of 2 thousand 610 crores to the government.

LIC may become Saudi Aramco of India

Market analysts believe that LIC’s IPO, like the Saudi Arabian state-owned oil company Saudi Aramco, could set a record. Aramco is the world’s largest listed company. The company raised Rs 1 lakh 82 thousand crore by selling just 1.5% shares through an IPO in December. It is the largest IPO in the world so far. The issue of LIC may also be India’s largest IPO. As of now, this record is in the name of Coal India. In November 2010, Coal India had raised Rs 15 thousand 199 crore from the IPO.

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