Lic ipo and future of lic

Lic ipo and future of lic

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Insurance sector is underpenetrated sector in India LIC is market leader thanks to commissions should we invest in LIC IPO and what will be the future of the company post ipo.

Government will sell at a premium no doubt
But what will the future prospectus

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Future prospects are as good as any other good company.Those who get lucky(& by that I mean extremely lucky) & get shares in LIC IPO will make a large profit on listing day itself.

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Govt forced LIC to buy NPA assets to bail out Banks and other companies
Now LIC is sitting on huge NPA assets.
Then Govt is exiting LIC.
What does that tell you?

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panchabhut wrote:

Govt forced LIC to buy NPA assets to bail out Banks and other companies
Now LIC is sitting on huge NPA assets.
Then Govt is exiting LIC.
What does that tell you?

Read economics news section on reputed major newspapers like hindu,toi etc not whatsapp/youtube rumors. rolleyes Govt is not exiting LIC (which requires a parliament procedure lengthy enough to create a large ruckus by entire opposition),it is just decreasing its stake from 100% to 90-85%. LIC current npa is 6.01% which is similar to icici bank 6.37% npa,nowhere near to be of any significant concern compared to public sector banks like IDBI,UCO & IOB having 20%+ npa & all others between 10-20% with only sbi,Indian bank & canara bank having less than 10% npa.
https://www.livemint.com/industry/banking/care-...

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guest_999 wrote:

Read economics news section on reputed major newspapers like hindu,toi etc not whatsapp/youtube rumors. rolleyes Govt is not exiting LIC (which requires a parliament procedure lengthy enough to create a large ruckus by entire opposition),it is just decreasing its stake from 100% to 90-85%. LIC current npa is 6.01% which is similar to icici bank 6.37% npa,nowhere near to be of any significant concern compared to public sector banks like IDBI,UCO & IOB having 20%+ npa & all others between 10-20% with only sbi,Indian bank & canara bank having less than 10% npa.
https://www.livemint.com/industry/banking/care-...

This is the first IPO to test waters. Same thing happened with several other PSUs.
I read news sections of Hindu. ToI is not worth reading. I also read the Budget documents of the Finance Ministry as well as the Balance Sheets of various companies incl LIC.
Sudden exit may require parliamentary approval but gradual exit in phased manner does not any such approval.

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guest_999 wrote:

Read economics news section on reputed major newspapers like hindu,toi etc not whatsapp/youtube rumors. rolleyes Govt is not exiting LIC (which requires a parliament procedure lengthy enough to create a large ruckus by entire opposition),it is just decreasing its stake from 100% to 90-85%. LIC current npa is 6.01% which is similar to icici bank 6.37% npa,nowhere near to be of any significant concern compared to public sector banks like IDBI,UCO & IOB having 20%+ npa & all others between 10-20% with only sbi,Indian bank & canara bank having less than 10% npa.
https://www.livemint.com/industry/banking/care-...

That’s why they are not doing all at a time
If they do 5% people like u convince remaining people and one day they would have done what they desired

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panchabhut wrote:

This is the first IPO to test waters. Same thing happened with several other PSUs.
I read news sections of Hindu. ToI is not worth reading. I also read the Budget documents of the Finance Ministry as well as the Balance Sheets of various companies incl LIC.
Sudden exit may require parliamentary approval but gradual exit in phased manner does not any such approval.

There are differences even between many psu & LIC certainly is among the best. IPO just expose a psu to much more public scrutiny because of market & increased pressure to perform. Obviously those who perform survives & those who don’t perish. If LIC can’t do it then I would worry about the future of the country’s economy itself & a $3 Trillion economy is watched very closely by the world.

Just reading without understanding real intent is also not useful.Same balance sheet is also read by various financial analysts & experts but unless most of them too reach the same conclusion as you,you can safely assume your conclusion to be incorrect. Also,dis-investing in any psu requires informing parliament & LIC is an exception even among psu so forget about gradual exit,even this 10-15% disinvestment will be hotly contested/debated in parliament(some lic union member/activist may even file case/pil in high court/supreme court).

Also toi may not match the hindu’s overall quality but it too has some worthy content but you need to pick it out.A very good article describing plight of India’s salaried class:
https://timesofindia.indiatimes.com/blogs/toi-e...

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guest_999 wrote:

There are differences even between many psu & LIC certainly is among the best. IPO just expose a psu to much more public scrutiny because of market & increased pressure to perform. Obviously those who perform survives & those who don’t perish. If LIC can’t do it then I would worry about the future of the country’s economy itself & a $3 Trillion economy is watched very closely by the world.

Just reading without understanding real intent is also not useful.Same balance sheet is also read by various financial analysts & experts but unless most of them too reach the same conclusion as you,you can safely assume your conclusion to be incorrect. Also,dis-investing in any psu requires informing parliament & LIC is an exception even among psu so forget about gradual exit,even this 10-15% disinvestment will be hotly contested/debated in parliament(some lic union member/activist may even file case/pil in high court/supreme court).

Also toi may not match the hindu’s overall quality but it too has some worthy content but you need to pick it out.A very good article describing plight of India’s salaried class:
https://timesofindia.indiatimes.com/blogs/toi-e...

And what makes you assume that I do not have the necessary expertise or understanding to read the financial statements or analyze the same or do not have knowledge or expertise on PSUs and public funding?
LIC was formed by a special Act, The Life Insurance Corporation Act, on the 19th of June 1956. this gives it a special status of “Statutory Corporation” and insulates it from the normal risks of any body corporate formed under the Companies Act. However, for the purpose of IPO, it would have to be delinked from the special Act and brought under the Companies Act, thereby removing its special protection.

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guest_999 wrote:

Future prospects are as good as any other good company.Those who get lucky(& by that I mean extremely lucky) & get shares in LIC IPO will make a large profit on listing day itself.

Just like IRCTC

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panchabhut wrote:

Govt forced LIC to buy NPA assets to bail out Banks and other companies
Now LIC is sitting on huge NPA assets.
Then Govt is exiting LIC.
What does that tell you?

Man, institutional players and FIIs and DIIs ll have some sort reins right now. Govt can’t force LIC to invest/buy stressed assets anymore. In the news of IPO, IDBI bank jumped 10% up yesterday only. Bhai market is positive about and rest will be told by time

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guest_999 wrote:

There are differences even between many psu & LIC certainly is among the best. IPO just expose a psu to much more public scrutiny because of market & increased pressure to perform. Obviously those who perform survives & those who don’t perish. If LIC can’t do it then I would worry about the future of the country’s economy itself & a $3 Trillion economy is watched very closely by the world.

Just reading without understanding real intent is also not useful.Same balance sheet is also read by various financial analysts & experts but unless most of them too reach the same conclusion as you,you can safely assume your conclusion to be incorrect. Also,dis-investing in any psu requires informing parliament & LIC is an exception even among psu so forget about gradual exit,even this 10-15% disinvestment will be hotly contested/debated in parliament(some lic union member/activist may even file case/pil in high court/supreme court).

Also toi may not match the hindu’s overall quality but it too has some worthy content but you need to pick it out.A very good article describing plight of India’s salaried class:
https://timesofindia.indiatimes.com/blogs/toi-e...

Here you went wrong bhai. Reading balance sheets of Financial companies is hell of a task. I have not seen many people capable of reading balance sheets of financial companies.
I openly admit that I don’t understand Financial sector. There is no shame in that.
But I will not assume others’ capabilities. It will be really rude, man.

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panchabhut wrote:

And what makes you assume that I do not have the necessary expertise or understanding to read the financial statements or analyze the same or do not have knowledge or expertise on PSUs and public funding?
LIC was formed by a special Act, The Life Insurance Corporation Act, on the 19th of June 1956. this gives it a special status of “Statutory Corporation” and insulates it from the normal risks of any body corporate formed under the Companies Act. However, for the purpose of IPO, it would have to be delinked from the special Act and brought under the Companies Act, thereby removing its special protection.

Where did I say you don’t have the expertise,just because you have expertise doesn’t make you always right hence the distinction between doctors,engineers,economists etc. I simply said if your conclusion is not supported by majority of experts then it can be considered incorrect which is the case so far till now. The day majority agrees with your conclusion I too will agree with your statement.

You are overestimating executive hold of govt over legislature. Irrespective of LIC status,simply because of its size nothing major can happen to it without a proper discussion in parliament. For comparison present govt considers CAA much more important than any business/economy policy & yet it is still unable to calm down the legislature despite its majority. There is also employees union with their leftist mindset always ready to strike & file PILs on mentioning of any dis-investment.
https://timesofindia.indiatimes.com/india/emplo...
https://www.pressreader.com/india/the-times-of-...

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bikidas2060 wrote:

Here you went wrong bhai. Reading balance sheets of Financial companies is hell of a task. I have not seen many people capable of reading balance sheets of financial companies.
I openly admit that I don’t understand Financial sector. There is no shame in that.
But I will not assume others’ capabilities. It will be really rude, man.

See my above reply bhai,I also do not have any formal knowledge of financial sector.

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In my simple understanding, govt needs money & LIC ipo will bring that. But it’s a sinking ship. Modi tries to make 5 trillion economy but may end up bringing economy at halt. Disc- i’m pro-bjp still.

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guest_999 wrote:

Where did I say you don’t have the expertise,just because you have expertise doesn’t make you always right hence the distinction between doctors,engineers,economists etc. I simply said if your conclusion is not supported by majority of experts then it can be considered incorrect which is the case so far till now. The day majority agrees with your conclusion I too will agree with your statement.

You are overestimating executive hold of govt over legislature. Irrespective of LIC status,simply because of its size nothing major can happen to it without a proper discussion in parliament. For comparison present govt considers CAA much more important than any business/economy policy & yet it is still unable to calm down the legislature despite its majority. There is also employees union with their leftist mindset always ready to strike & file PILs on mentioning of any dis-investment.
https://timesofindia.indiatimes.com/india/emplo...
https://www.pressreader.com/india/the-times-of-...

The concept of “majority” works only for parliament and legislative assemblies, not in the field of technical expertise.
My views are based on my own expertise and experience. I am bound by certain code of ethics so can not share my actual field of operations or experience. You may or may not accept my views. That is your wish. But if you want to challenge that, then you need to challenge it purely on professional points, not on the grounds of “majority”.

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panchabhut wrote:

The concept of “majority” works only for parliament and legislative assemblies, not in the field of technical expertise.
My views are based on my own expertise and experience. I am bound by certain code of ethics so can not share my actual field of operations or experience. You may or may not accept my views. That is your wish. But if you want to challenge that, then you need to challenge it purely on professional points, not on the grounds of “majority”.

Exactly but economics is not maths or physics & you are not Joseph Stiglitz or Amartya Sen either(no offense but when making an authoritative statement like “Govt forced LIC to buy NPA assets to bail out Banks and other companies.Then Govt is exiting LIC.What does that tell you?” requires at least some decent credentials especially when the company in question manages almost half a trillion $ of assets) not to mention even Joseph Stiglitz & Amartya Sen will not agree 100% on all economy related matters.

Anyway just like you hold your own view based on your expertise,I hold my own view based on logical reasoning.I never challenged you,I simply contested your claim.Had you just said this is your own view based on your expertise(something like I have read lic balance sheet & I feel its npa are underestimated so I won’t be buying it or recommending it to my family/friends etc) then I wouldn’t have contested it. See my first post here for reference.I use words like “as good as any other good company. & LIC IPO will make a large profit on listing day itself.(irctc example)” If I were making similar statements like you I would have posted something like “LIC is the best insurance company in India & its future prospects are unlimited so get its shares eyes closed.Just buy its share & they will double or triple in few months….”

I hope you get my point but if not then let’s end it here because there is nothing further to productively discuss it.

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…Like all topic in present time India opinion is divided on the basis of political affiliation….but my question is…

…after u sell HAL,BPCL,HPCL blah blah blah and LIC…what after that…GOI has spent RBI’s money as well…to meet their fiscal deficit target they are selling family’s silver…

…what if economic conditions remains the same or worse….what if we have a bad monsoon year or two?….

….LIC should not be touched coz its the lifetime earning of an honest middle class man….

….and those who believe in the fact that LIC after IPO will become better, more efficient…My question is why middle class guys still prefer PF and LIC despite the fact that mutual funds and shares have seen exponential growth…The reason being the assurity of LIC…they don’t want more money or better growth they want stability and assurity which market and open nature of market will not provide.

…Things start from 5% and before you see some springs they tend to reach 45%….Bad step…
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still_guessing wrote:
…Like all topic in present time India opinion is divided on the basis of political affiliation….but my question is…

…after u sell HAL,BPCL,HPCL blah blah blah and LIC…what after that…GOI has spent RBI’s money as well…to meet their fiscal deficit target they are selling family’s silver…

…what if economic conditions remains the same or worse….what if we have a bad monsoon year or two?….

….LIC should not be touched coz its the lifetime earning of an honest middle class man….

….and those who believe in the fact that LIC after IPO will become better, more efficient…My question is why middle class guys still prefer PF and LIC despite the fact that mutual funds and shares have seen exponential growth…The reason being the assurity of LIC…they don’t want more money or better growth they want stability and assurity which market and open nature of market will not provide.

…Things start from 5% and before you see some springs they tend to reach 45%….Bad step…

India is probably the only country in the world where left or right,both opposes privatization/less govt control in economy & result is in front of everyone.China’s economy left this nation’s economy behind in dust & in next 10-15 years Bangladesh too will left it behind. My question is, is govt your neighbourhood shop or some family enterprise holding on to these “family silver”. No knowledgeable enough person takes insurance policy for investment & those who do gets neither a good insurance policy nor a good investment option. Also those who don’t change with times & stick to old/outdated beliefs will never make it to the top aka why many are born in middle class & live their entire life as middle class while some born in even poor family & become rich in few decades.

So tell me which has more chances of occurring: A politically controlled company/organization going from 5% to 45% npa(to refresh your memory just in case,Air India was once considered as one of the best airlines in the world & people used to celebrate in 90s when they get a bsnl landline connection) or a professionally run company(again to refresh your memory,hdfc bank share price was Rs.20 in 2002 & now its market capitalization is more than all public sector banks combined).

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guest_999 wrote:

India is probably the only country in the world where left or right,both opposes privatization/less govt control in economy & result is in front of everyone.China’s economy left this nation’s economy behind in dust & in next 10-15 years Bangladesh too will left it behind. My question is, is govt your neighbourhood shop or some family enterprise holding on to these “family silver”. No knowledgeable enough person takes insurance policy for investment & those who do gets neither a good insurance policy nor a good investment option. Also those who don’t change with times & stick to old/outdated beliefs will never make it to the top aka why many are born in middle class & live their entire life as middle class while some born in even poor family & become rich in few decades.

So tell me which has more chances of occurring: A politically controlled company/organization going from 5% to 45% npa(to refresh your memory just in case,Air India was once considered as one of the best airlines in the world & people used to celebrate in 90s when they get a bsnl landline connection) or a professionally run company(again to refresh your memory,hdfc bank share price was Rs.20 in 2002 & now its market capitalization is more than all public sector banks combined).

…your argument is neither substantive nor compelling…..

…Disinvestment and selling family silver for cheap to crony is harming itself….

…vajpayee sold Balco to vedanta….who got the profit obviously vedanta….

…Now LIC need to be sold coz relaince insurance of ambani has to be number one…

…why are we selling BPCL which is giving government 7k-8k crores as profit every year?…

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guest_999 wrote:

India is probably the only country in the world where left or right,both opposes privatization/less govt control in economy & result is in front of everyone.China’s economy left this nation’s economy behind in dust & in next 10-15 years Bangladesh too will left it behind. My question is, is govt your neighbourhood shop or some family enterprise holding on to these “family silver”. No knowledgeable enough person takes insurance policy for investment & those who do gets neither a good insurance policy nor a good investment option. Also those who don’t change with times & stick to old/outdated beliefs will never make it to the top aka why many are born in middle class & live their entire life as middle class while some born in even poor family & become rich in few decades.

So tell me which has more chances of occurring: A politically controlled company/organization going from 5% to 45% npa(to refresh your memory just in case,Air India was once considered as one of the best airlines in the world & people used to celebrate in 90s when they get a bsnl landline connection) or a professionally run company(again to refresh your memory,hdfc bank share price was Rs.20 in 2002 & now its market capitalization is more than all public sector banks combined).

…don’t try to link everything with share prices….people gave their sweat n blood to create history and company….if share price is the only criterion then government should not disinvest anything coz we know rupee is depreciating and value erosion will make share prices climb up….

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abhijitja wrote:

In my simple understanding, govt needs money & LIC ipo will bring that. But it’s a sinking ship. Modi tries to make 5 trillion economy but may end up bringing economy at halt. Disc- i’m pro-bjp still.

…Modi will rename indian economy as 5 trillian economy in 2024….done….

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panchabhut wrote:

The concept of “majority” works only for parliament and legislative assemblies, not in the field of technical expertise.
My views are based on my own expertise and experience. I am bound by certain code of ethics so can not share my actual field of operations or experience. You may or may not accept my views. That is your wish. But if you want to challenge that, then you need to challenge it purely on professional points, not on the grounds of “majority”.

when leli and gang run out of counter argument
there last Burqa is personal attack

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still_guessing wrote:

…your argument is neither substantive nor compelling…..

…Disinvestment and selling family silver for cheap to crony is harming itself….

…vajpayee sold Balco to vedanta….who got the profit obviously vedanta….

…Now LIC need to be sold coz relaince insurance of ambani has to be number one…

…why are we selling BPCL which is giving government 7k-8k crores as profit every year?…

You clearly don’t understand how economy & market works so any further argument is unnecessary.Believe in whatever you think is right,people in power won’t be as short-sighted as you(hopefully the lesson taught in 1991 will not let it happen).

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still_guessing wrote:

…don’t try to link everything with share prices….people gave their sweat n blood to create history and company….if share price is the only criterion then government should not disinvest anything coz we know rupee is depreciating and value erosion will make share prices climb up….

http://ncert.nic.in/textbook/textbook.htm?lee...-6

A good quote for you:

“The Greatest Obstacle to Discovery Is Not Ignorance—It Is the Illusion of Knowledge”

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still_guessing wrote:

Hahaha

Hail the universal source of knowledge….we are all ignorant…apologies Lord studious

Subah kaa bhoola agar shaam ko vaapas ghar aa jaye toh usey bhoola nahi kehte laughing Here something more for you from this lord:
http://ncert.nic.in/textbook/textbook.htm?keec....

English saying equivalent: It is never too late to realize your mistake.

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guest_999 wrote:

Exactly but economics is not maths or physics & you are not Joseph Stiglitz or Amartya Sen either(no offense but when making an authoritative statement like “Govt forced LIC to buy NPA assets to bail out Banks and other companies.Then Govt is exiting LIC.What does that tell you?” requires at least some decent credentials especially when the company in question manages almost half a trillion $ of assets) not to mention even Joseph Stiglitz & Amartya Sen will not agree 100% on all economy related matters.

Anyway just like you hold your own view based on your expertise,I hold my own view based on logical reasoning.I never challenged you,I simply contested your claim.Had you just said this is your own view based on your expertise(something like I have read lic balance sheet & I feel its npa are underestimated so I won’t be buying it or recommending it to my family/friends etc) then I wouldn’t have contested it. See my first post here for reference.I use words like “as good as any other good company. & LIC IPO will make a large profit on listing day itself.(irctc example)” If I were making similar statements like you I would have posted something like “LIC is the best insurance company in India & its future prospects are unlimited so get its shares eyes closed.Just buy its share & they will double or triple in few months….”

I hope you get my point but if not then let’s end it here because there is nothing further to productively discuss it.

Our govts have a nasty habit of passing topi(hats, caps) from one succesful company to other. For example, Indian Airlines failed. Now they forced profitable Air India to acquire it. Air India is now bankrupt. Topi adla badli chalta rhta hai bandhu.

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•Govt sold 45% of Hindustan Zinc for Rs 769 cr in 2002. Its 30% stake is now worth Rs 27,000 cr
•Air india was once more profitable than Reliance. Har cheez ka ek sahi time hota hai. And i am pretty confident of our govt’s (whether bjp, cong, xyz) ability to ruin all psus. Better to leave them in their golden days.

Govt has no business to be in the business and no one is talking about complete exit. They shall decrease their stake < 51%, and exit mgt.
@still_guessing

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still_guessing wrote:

…your argument is neither substantive nor compelling…..

…Disinvestment and selling family silver for cheap to crony is harming itself….

…vajpayee sold Balco to vedanta….who got the profit obviously vedanta….

…Now LIC need to be sold coz relaince insurance of ambani has to be number one…

…why are we selling BPCL which is giving government 7k-8k crores as profit every year?…

so you telling that disinvestment in LIC will give benefit to Reliance Insurance only?
Not to SBI, BOB, or any other public or private company ?
Most of the middle class people don’t know about Reliance is in Insurance sector.
Is this the first did-investment in Indian history??
Reliance came in existence after 2014 ? or before 2014 , nobody was knowing capability of reliance ?

Now people’s attitude is changing. Till now people are only preferring to buy Insurance from LIC only. but now a days people also prefer private or any public bank insurance because LIC plans are very costly compared to other company.
By the way , as far i observed, Indian middle (below ) class are not awaken or don’t give importance to Life Insurance or Medical insurance.

LIC reached this height because there were no competitor before few year. but now there are many.
So if Govt don’t dis-invest in high-time, it could be liability in a decade or so.

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