LIC IPo Case study about the history and result[1].pptx

LIC IPO case study

1. IPO One case study in Indian Equity Market FIRMS

2. INTRODUCTION: Stock Market The stock market as a whole is an exchange mechanism that helps investors buy and sell shares in publicly traded companies. T o expand, diversify the existing business, debt repayment, acquisitions, etc., companies or corporate houses need huge capital, hence this capital can be collected by inviting public for investment in the company. Two types of Stock Market is there…….Primary & Secondary To become a public company from a private company, it must have SEBI & existing stakeholder’s approval. Once SEBI & stake holder’s clearance is received, private company can start procedure to become public company. That’s why , this process is also defined as the process of converting private company into public.

3. INTRODUCTION: Stock Market The primary market: is where new securities are created and issued, which is called Initial Public Offer (IPO) while the secondary market is where investors buy and sell those securities or shares of a company already listed in the market: Secondary market: Also known as the stock market or stock exchange, this is where investors trade existing securities that have already been issued. E.g.: New York Stock Exchange and the Nasdaq in US, like NSE & BSE in India etc.

4. Types of Firms Sole Proprietorship   Partnerships Companies Private Company Public company One Person Company (OPC) Government Company Co-operative society Limited Liability Partnership (LLP) Non Profit Organizations.

5. COMPANY Private Company: A private company is a business entity that is not publicly traded on a stock exchange. This means that its shares are not available for purchase by the general public. Instead, ownership is typically held by a small group of individuals, families, or other entities(max 50). PUBLIC COMPANY : A public company is a business entity that has offered its shares to the public for purchase. These shares are traded to public, allowing anyone to buy or sell them ( min 7). It act as a means to raise capital. Government Company: A Government company is a business that are owned and controlled by a government

6. IPO An IPO is an initial public offering, in which shares of a PRIVATE COMPANY are made available to the public for the first time. An IPO allows a company to raise equity capital from public investors. IPOs provide companies with an opportunity to obtain capital by offering shares through the primary market. An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance

7. Steps for IPO and Listing

8. Case Study on LIC IPO Life Insurance Corporation of India (LIC) is the largest insurance provider company in Indi and is a Government-owned insurance company. The LIC Act in 1956, with the goal of spreading life protections to all insurable people in the nation, giving them satisfactory monetary cover at a sensible expense. Today, LIC controls 66% of India’s insurance market with an incredible absolute of 290 million policyholders. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products. It has more than 100,000 employees and one million insurance agents.

9. Case Study on LIC IPO It manages assets of 36.7 trillion rupees ($491 billion), which equates to nearly 16 percent of India's gross domestic product. The IPO of LIC was also part of the Government’s policy to raise fund for much-needed developmental activities. To bring the IPO, a few amendments have been made to the LIC Act of 1956. These changes were passed in the Union Financial Budget of 2021, under the Finance Bill by the Parliament.

10. Case Study on LIC IPO LIC IPO Promoter Holding The President of India, acting through the Ministry of Finance, Government of India is the company promoter. Share holding in Pre-issue was100%. Share holding Post-issue 96.5% The IPO liquidated around 3.5% of LIC to Public. The IPO opened on 4th May 2022 with an offer for sale of 22.14 crore shares and closed on 9th May 2022 .

11. Case Study on LIC IPO The shares were allotted on 12th May and the listing in the secondary market date was scheduled on 17th May 2022 . The Government has fixed the issue price of LIC shares at Rs  949 apiece, the upper end of the IPO price band, fetching the exchequer around  Rs 21000 crores . The shares were trading at a discount of Rs 15-20 a piece in the Grey Market. The issue was subscribed 2.95 times , driving areas of strength for workers and policyholders of the backup plan.

12. Case Study on LIC IPO As we see the LIC IPO is the biggest IPO in India of around Rs 21,000 Cr. And after the LIC debuted on the stock exchanges at Rs 865/share, in a discount of 9% against the issue price of Rs 949 per share. The big l esson for investors end is that  do not buy that IPO which is overvalued or overhyped . The best example IPOs are LIC, Paytm, and Zomato etc were overvalued that results in fail while listed in the secondary market. However, the listing of India’s largest IPO was jinxed as the stock debuted at an 9% discount and has never seen that IPO price since then at least for next one year. LIC share price has fallen around 40% from the issue price of the IPO to a lowest share price of around ₹567 apiece, taking the total erosion of market capitalization to about Rs 2.5 lakh crore. Almost after one and half year of listing, the LIC shares has crossed its listing price and surged to a record high of Rs 1222/- apiece on August 1 st 2024.

13. References Economic T imes India Today The P rint Investopedia IIFL Securities Groww.in The Hindu Business Line

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