LIC IPO | How UBS views PSU insurer vs listed peers ahead of mega listing
According UBS, the market could be assigning a valuation discount to LIC compared to its listed peers, owing to its traditionally savings-heavy business mix, lower operating leverage, heavier dependence on the agency channel and state-owned enterprise (SOE) status.
In the brokerage’s view, the market seems to be pricing in increased competition from LIC ahead of its potential listing. LIC depends heavily on the agency channel unlike private insurers, though the productivity of the state-run company’s agents is significantly higher, UBS pointed out.
Here are some highlights of what UBS said:
–LIC to be third largest stock in India by market cap
–LIC IPO size equivalent to 25 percent of total capital raise in 2021
–LIC largest institutional investors in Indian market with $520 billion in total AUM
–LIC an important entity for government
–LIC owns over 19 percent of all government bonds, bigger than RBI
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