Home » Excitement Over LIC IPO – Is It Worth It?

Excitement Over LIC IPO – Is It Worth It?

We have been cautious about all IPOs in the past and advised clients to avoid glamorous and even the not so glamorous ones. With respect to LIC, while it is a market leader, we are concerned about their steady reduction in market share. Since markets always look forward, the Price to Embedded Value ratio is also at a ‘discount’ compared to the large private life insurers. This may not be an anomaly that will get addressed soon. To use a software parlance, it is a feature and not a bug; bugs can be fixed relatively quickly. We are also cautious having seen the experience of GIC Reinsurance and other large PSUs over the long term. 

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