LIC larger recipient of savings than SBI deposits

Nearly Rs 10 out of every Rs 100 saved by the Indian household each year goes to LIC, making it larger than even the perceived staple of household savings – a deposit with SBI, foreign brokerage UBS said in a report.

LIC garners the lion’s share of household savings flow – at about 10 per cent each year; the number has come off over the years. LIC maintains lead over SBI’s deposits – the next largest destination for household savings in India, UBS said.

LIC has filed a draft prospectus for an IPO. Based on media reports, the government could raise Rs 650 bn ($8.6bn) by selling a 5 per cent stake (all via an offer for sale), at a listing valuation of $172bn. The insurance behemoth had unclaimed funds to the tune of Rs 21,539 cr as of September 2021, as per draft prospectus filed for IPO with Sebi.

At this scale, LIC would be the third-largest stock in India by market cap, and the 32nd-largest by free float, ensuring an entry into mainstream indices, eg, Nifty-50. Media reports suggest the government is looking to tap into LIC’s large customer base (280m policies, about one per family in India) to generate buying interest in the IPO.

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