Executive Summary
The Life Insurance Corporation of India (LIC) Initial Public Offering (IPO) marked a watershed moment in Indian capital markets history. Launched in May 2022, this mega public offering was not only India's largest IPO but also represented a significant milestone in the government's disinvestment program. The IPO raised approximately ₹21,000 crores through the sale of 221.37 million shares, representing 3.5% of the government's stake in this insurance behemoth.
Investment banks played a pivotal role in orchestrating this complex transaction. The underwriting consortium, comprising ten prominent merchant bankers, was responsible for price discovery, risk assessment, regulatory compliance, and ensuring successful subscription. Goldman Sachs, Citigroup, SBI Capital Markets, Kotak Mahindra Capital, Axis Capital, ICICI Securities, JM Financial, JP Morgan, BofA Securities, and Nomura acted as book running lead managers (BRLMs), collectively managing the intricate process of taking India's largest financial institution public.
This case study examines the multifaceted role of investment banks in IPO underwriting, analyzing their functions in valuation, marketing, risk management, and post-listing stabilization. Through the lens of the LIC IPO, we explore how investment banks navigate market volatility, regulatory frameworks, and stakeholder expectations to execute large-scale public offerings in emerging markets.
1. Company Overview - Life Insurance Corporation of India
Background
Life Insurance Corporation of India (LIC) was established in 1956 through the nationalization of 245 private life insurance companies. As India's largest life insurer, LIC has maintained market dominance for over six decades with a comprehensive portfolio of insurance and investment products.
Key Facts:
- Founded: September 1, 1956
- Headquarters: Mumbai, Maharashtra
- Chairman: Siddhartha Mohanty (as of 2025)
- Ownership: Government of India (96.5% post-IPO)
- Business: Life Insurance, Pension Plans, Investment Products
Market Position
| Metric |
Value |
| Market Share (Individual Policies) |
61.4% (FY2021-22) |
| Total Premium Income (FY2021-22) |
₹5.02 Lakh Crores |
| Assets Under Management |
₹40+ Lakh Crores |
| Active Policies |
280+ Million |
| Agent Network |
1.3+ Million Agents |
2. Financial Analysis & Performance
Financial Highlights (₹ in Crores)
| Particulars |
FY 2019-20 |
FY 2020-21 |
FY 2021-22 |
| Total Premium Income |
4,99,036 |
5,33,343 |
5,02,121 |
| Investment Income |
2,55,828 |
2,77,501 |
2,94,732 |
| Profit After Tax |
2,710 |
2,920 |
1,616 |
| Embedded Value |
4,66,474 |
5,39,686 |
5,96,018 |
3. Investment Banks & Underwriting Consortium
The LIC IPO was managed by a consortium of 10 book running lead managers (BRLMs), representing a mix of domestic and international investment banks. This structure ensured comprehensive market coverage and risk distribution.
Book Running Lead Managers (BRLMs)
Goldman Sachs (India) Securities
Citigroup Global Markets
SBI Capital Markets
Kotak Mahindra Capital
Axis Capital
ICICI Securities
JM Financial
JP Morgan India
BofA Securities
Nomura Financial
4. IPO Timeline & Process
February 2022
Filing of Draft Red Herring Prospectus (DRHP) with SEBI. Government approves disinvestment of 3.5% stake.
April 2022
SEBI approval received. Price band announced at ₹902-949 per share. Roadshows and investor meetings conducted.
May 4-9, 2022
IPO subscription period. Issue subscribed 2.95 times with strong institutional interest.
May 12, 2022
Basis of allotment finalized. Shares credited to demat accounts.
May 17, 2022
Listing on BSE and NSE. Opening price: ₹872 (8.1% below issue price).
5. Strategic Management & Investment Banking Roles
Key Functions of Investment Banks
1. Valuation & Price Discovery
Investment banks conducted extensive valuation exercises using Embedded Value (EV) methodology, comparing LIC with domestic and international peers. The valuation considered LIC's massive AUM, market dominance, and regulatory constraints.
2. Due Diligence & Documentation
Comprehensive due diligence covering financial statements, actuarial assessments, regulatory compliance, legal matters, and business operations. Preparation of offer documents including DRHP and Red Herring Prospectus.
3. Marketing & Roadshows
Organized domestic and international roadshows targeting institutional investors. Created investment thesis highlighting LIC's market leadership, distribution strength, and growth potential.
4. Risk Management & Underwriting
Assessment of market risks, subscription risks, and post-listing volatility. Underwriting commitment ensured issue success even in adverse market conditions.
5. Regulatory Compliance
Navigation of complex regulatory requirements including SEBI guidelines, insurance regulations, and government approvals. Ensured compliance with listing norms.
6. Post-IPO Stabilization
Green shoe option mechanism to stabilize prices post-listing. Continuous market making and liquidity provision in initial trading period.
6. Post-IPO Performance Analysis
Performance Metrics
| Metric |
Value |
| Issue Price |
₹949 |
| Listing Day Price |
₹872 (-8.1%) |
| 52-Week High |
₹920 |
| 52-Week Low |
₹530 |
| Current Market Cap (Oct 2024) |
₹4.5+ Lakh Crores |
7. Challenges & Learnings
Challenges Faced
- Market Volatility: Global market turbulence due to geopolitical tensions and rate hike concerns
- Valuation Concerns: Debate over appropriate valuation methodology for a government-owned monopoly
- Size & Complexity: Managing India's largest-ever IPO required unprecedented coordination
- Regulatory Constraints: Insurance sector regulations limited pricing flexibility
- Retail Participation: Balancing retail and institutional allocation in a government disinvestment
Key Learnings
- Importance of realistic pricing aligned with market conditions
- Need for comprehensive investor education in complex financial products
- Value of strong underwriting consortium for risk distribution
- Critical role of post-IPO support mechanisms
- Significance of timing in IPO success
8. Comparison with Other Recent Successful Indian IPOs
Recent Major IPOs Comparison (2021-2024)
| Company |
Year |
Issue Size (₹ Cr) |
Listing Gain/Loss |
Subscription |
| Hyundai Motor India |
2024 |
27,870 |
-1.3% |
2.37x |
| LIC |
2022 |
21,000 |
-8.1% |
2.95x |
| Paytm |
2021 |
18,300 |
-9.0% |
1.69x |
| Swiggy |
2024 |
11,327 |
+7.7% |
3.59x |
| Zomato |
2021 |
9,375 |
+53% |
38.25x |
| Bajaj Housing Finance |
2024 |
6,560 |
+114% |
65.61x |
| Nykaa |
2021 |
5,352 |
+79% |
82x |
9. Case Study: Recent Successful IPOs in Indian Market (2024)
🚗 Hyundai Motor India Ltd - India's Largest IPO
Company Background:
- Established: 1996
- Headquarters: Chennai, Tamil Nadu
- Business: Automobile Manufacturing
- Market Share: 14.6% (2nd largest in India)
- Manufacturing Capacity: 824,000 units/year
IPO Details:
- Issue Size: ₹27,870 crores
- Issue Date: October 15-17, 2024
- Issue Price: ₹1,960 per share
- Listing Date: October 22, 2024
- Listing Price: ₹1,934 (-1.3%)
Financial Performance (FY2023-24):
| Metric |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
| Revenue (₹ Cr) |
50,313 |
60,247 |
69,829 |
| Net Profit (₹ Cr) |
4,653 |
4,716 |
6,054 |
| Operating Margin (%) |
12.1% |
10.8% |
11.9% |
Strategic Management:
- Product Diversification: Portfolio spanning 13 models across segments
- EV Strategy: Committed ₹4,000 crores for electric vehicle development
- Export Hub: Chennai plant exports to 88 countries
- Localization: 90%+ local content in manufacturing
🍔 Swiggy Ltd - Food Delivery Giant
Company Background:
- Founded: 2014
- Headquarters: Bengaluru, Karnataka
- Business: Food Delivery, Quick Commerce
- Active Users: 15+ million monthly
- Restaurant Partners: 200,000+
IPO Details:
- Issue Size: ₹11,327 crores
- Issue Date: November 6-8, 2024
- Issue Price: ₹390 per share
- Listing Date: November 13, 2024
- Listing Price: ₹420 (+7.7%)
Financial Performance:
| Metric |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
| Revenue (₹ Cr) |
5,705 |
8,027 |
11,247 |
| Net Loss (₹ Cr) |
-3,629 |
-4,179 |
-2,350 |
| EBITDA Margin (%) |
-52.3% |
-43.1% |
-18.9% |
Strategic Management:
- Quick Commerce: Swiggy Instamart for 10-minute grocery delivery
- Unit Economics: Path to profitability with improved margins
- Technology: AI-driven logistics and delivery optimization
- Market Expansion: Present in 580+ cities across India
🏠 Bajaj Housing Finance Ltd - Stellar Debut
Company Background:
- Established: 2008
- Headquarters: Pune, Maharashtra
- Business: Housing Finance, Loans
- AUM: ₹91,000+ crores
- Part of Bajaj Finance Group
IPO Details:
- Issue Size: ₹6,560 crores
- Issue Date: September 9-11, 2024
- Issue Price: ₹70 per share
- Listing Date: September 16, 2024
- Listing Price: ₹150 (+114%)
Financial Performance:
| Metric |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
| Total Income (₹ Cr) |
4,699 |
6,110 |
8,634 |
| Net Profit (₹ Cr) |
955 |
1,325 |
1,730 |
| ROE (%) |
13.8% |
15.2% |
16.9% |
Strategic Management:
- Asset Quality: Gross NPA at 0.30%, industry-leading
- Digital Platform: 70% of loans disbursed digitally
- Risk Management: Conservative lending with strong underwriting
- Growth Strategy: Focus on retail home loans and developer financing
⚡ NTPC Green Energy Ltd - Renewable Power
Company Background:
- Incorporated: 2022
- Parent: NTPC Limited
- Business: Renewable Energy
- Capacity: 3.3 GW operational
- Target: 60 GW by 2032
IPO Details:
- Issue Size: ₹10,000 crores
- Issue Date: November 19-22, 2024
- Issue Price: ₹108 per share
- Listing Date: November 27, 2024
- Listing Price: ₹110 (+3.7%)
Financial Performance:
| Metric |
FY 2022-23 |
FY 2023-24 |
Target FY25 |
| Revenue (₹ Cr) |
1,156 |
2,378 |
3,500 |
| EBITDA (₹ Cr) |
985 |
2,089 |
3,000 |
| EBITDA Margin (%) |
85.2% |
87.8% |
85.7% |
Strategic Management:
- Green Energy Focus: Solar, wind, and hybrid projects
- Government Support: Backed by India's largest power producer
- Pipeline: 20+ GW under development
- ESG Leader: Contributing to India's net-zero goals
10. Key Insights from Recent Successful IPOs
Success Factors for Recent IPOs:
- Strong Fundamentals: Companies with proven business models and positive cash flows attracted higher subscriptions
- Sector Selection: Renewable energy, fintech, and consumer tech sectors saw significant investor interest
- Valuation Discipline: Reasonably priced IPOs (Bajaj Housing, NTPC Green) delivered better listing performance
- Growth Story: Companies demonstrating consistent revenue growth and clear path to profitability
- Market Timing: Favorable market conditions in 2024 supported successful listings
Role of Investment Banks in Recent IPOs:
- Hybrid Work Models: Multiple BRLMs working together for mega deals (Hyundai had 10 BRLMs)
- Digital Roadshows: Virtual investor meetings expanded reach to global institutional investors
- ESG Integration: Banks emphasized sustainability metrics for companies like NTPC Green Energy
- Retail Engagement: Enhanced digital platforms made IPO participation easier for retail investors
- Risk Mitigation: Green shoe options and stabilization mechanisms protected against volatility
Sector-wise IPO Distribution (2024)
| Sector |
Number of IPOs |
Total Amount Raised (₹ Cr) |
Average Listing Gain |
| Automobile |
1 |
27,870 |
-1.3% |
| Financial Services |
1 |
6,560 |
+114% |
| Food Tech / E-commerce |
1 |
11,327 |
+7.7% |
| Renewable Energy |
1 |
10,000 |
+3.7% |
10. Conclusion
The LIC IPO demonstrated the critical role investment banks play in executing complex public offerings. Despite challenging market conditions, the consortium of underwriters successfully managed India's largest IPO through meticulous planning, comprehensive risk management, and strategic positioning.
Investment banks served as intermediaries between the government (seller) and investors (buyers), ensuring price discovery, market stability, and regulatory compliance. Their multifaceted responsibilities—from valuation and documentation to marketing and post-listing support—proved essential in navigating the complexities of taking a 66-year-old insurance giant public.
The analysis of recent successful IPOs in 2024—including Hyundai Motor India (India's largest IPO at ₹27,870 crores), Swiggy, Bajaj Housing Finance (stellar 114% listing gains), and NTPC Green Energy—demonstrates the continued vitality of India's capital markets. These IPOs showcase diverse sectors from automobiles and fintech to renewable energy, with investment banks playing crucial roles in each offering.
While the LIC IPO faced initial headwinds with listing day losses, the long-term perspective reveals LIC's continued market dominance and operational strength. The experience offers valuable insights for future large-scale disinvestments and underscores the indispensable role of investment banking in capital market development. The successful IPOs of 2024 further validate India's position as a leading global IPO destination.
11. References
- Life Insurance Corporation of India - Red Herring Prospectus (2022)
- Hyundai Motor India Ltd - Draft Red Herring Prospectus (2024)
- Swiggy Ltd - Red Herring Prospectus (2024)
- Bajaj Housing Finance Ltd - Offer Document (2024)
- NTPC Green Energy Ltd - Prospectus (2024)
- Securities and Exchange Board of India (SEBI) - IPO Guidelines and Regulations (www.sebi.gov.in)
- BSE India - Stock Data and Performance Metrics (www.bseindia.com)
- NSE India - Historical Trading Data and IPO Statistics (www.nseindia.com)
- Ministry of Finance, Government of India - Disinvestment Reports and Policy Documents
- Economic Times - IPO Coverage and Market Analysis (economictimes.indiatimes.com)
- Business Standard - Insurance and Financial Sector Reports (www.business-standard.com)
- Moneycontrol - IPO Tracker and Investment Analysis (www.moneycontrol.com)
- IRDAI Annual Reports - Insurance Industry Statistics and Regulations (www.irdai.gov.in)
- Investment Banking Research Reports - Goldman Sachs, Citigroup, Kotak Mahindra Capital
- Groww - IPO Calendar and Recent Listings Data (groww.in/ipo)
- Angel One - IPO Watch and Market Updates (www.angelone.in)
- White & Case LLP - Global IPO Market Analysis 2024-25
- Inc42 - Indian Startup IPO Tracker (inc42.com)
- Society of Automobile Manufacturers Association (SIAM) - Industry Reports
- RedSeer Consulting - Food Delivery and Quick Commerce Market Analysis
Project prepared for Experiential Learning Assignment
Submission Date: October 9, 2025