Ahead of IPO, LIC reveals Q3 results, profit rises to Rs.235 cr

Insurance behemoth Life Insurance Corp. (LIC) has released its financial results for the December quarter (Q3FY22), ahead of its planned IPO. According to the insurer's website, net profit rose to Rs.235 crore in the third quarter as against a meagre Rs. 94 lakh in the same period last year.

Similarly, net profit for the nine months period ended December surged to Rs. 1,6438 crore from Rs. 7 crore a year ago.

Total premiums collected during the reporting quarter came in at Rs97,761 crore as against ₹97,008 crore a year earlier.

First year premiums during the third quarter surged 10% year-on-year to Rs. 8,748 crore. It was Rs.7,957 crore in the corresponding quarter of last year.

Capital markets regulator has recently approved LIC initial public offering (IPO) worth about ₹63,000 crore. However, the government is planning to delay the issue in the wake of Russia-Ukraine conflict. But there has been no formal announcement of the deal being delayed.

The government has plans to sell 5% of LIC and the IPO will be completely an offer for sale no fresh equity will be issued, according to the offer documents.

LIC's embedded value, which is a measure of the consolidated shareholders' value in an insurance company, has been pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors.

Although the DRHP does not disclose the market valuation of LIC, as per industry standards, it would be about 3 times the embedded value or around Rs.16 lakh crore.

The LIC IPO would be the biggest IPO in the history of Indian stock market and once listed, LIC's market valuation would be comparable to top companies like RIL and TCS. So far, the amount mobilised from IPO of Paytm in 2021 was the largest ever at Rs. 18,300 crore, followed by Coal India (2010) at nearly Rs. 15,500 crore and Reliance Power (2008) at Rs. 11,700 crore.