The Assets Under Management (AUMs) of the IPO-bound Life Insurance Corporation of India (LIC) more than doubled to ₹36.7 trillion on a standalone basis in FY21 from ₹16.18 trillion in the previous year, according to officials privy to presentations made to potential investors. AUMs comprise investments made by the behemoth and assets held to cover linked liabilities.
LIC’s AUMs exceed that for the entire Indian mutual funds industry, which had AUM of approximately ₹31.4 trillion, the officials said.
These are some of the data points the LIC management highlighted to potential investors ahead of its Initial Public Offering (IPO), which is expected to hit the market in the last quarter of this fiscal.
The officials also pointed out that LIC’s equity holdings equal about 4% of the National Stock Exchange’s (NSE) total market cap. As of August 2021, the NSE had a market cap of $3.4 trillion.
They said LIC commanded market share of 66% in the Indian life insurance industry. In the 2019-2021 period, LIC grew at a compounded annual growth rate of 13.2%. As of March 31, 2020, LIC’s total investment portfolio stood at ₹33.7 lakh crore, roughly four times that of the total for private insurance firms, they said.
Interestingly, its non-performing assets are about 6%, compared with the industry norm of 1.5-2%.
In the last Budget, the government announced an aggressive divestment target of ₹1.75 lakh crore. The bulk of it is expected to be mobilised through the LIC IPO and the privatisation of several companies, including Air India and Bharat Petroleum Corporation (BPCL).
A 10% stake sale in LIC could fetch around ₹1-1.5 lakh crore, as per industry estimates.