What do you think are the challenges the government may face in the LIC IPO?

Here are some key challenges that the government may face in the LIC IPO.

· Firstly, there is the case of competition. Private life insurers have already gained 30% market share and they are growing faster than LIC.

· Then there are big doubts about the debt portfolio of LIC and like in telecom and banking, PSU players have lagged their private counterparts in valuations. It is not clear whether the investors will be willing to pay such top dollar for LIC when Fintech players are driving sales.

· There are questions on appetite. Paytm was one-fifth of the size of the IPO that LIC is proposing. Paytm struggled to get through and its price is 50% below the issue price. Global institutional enthusiasm is not yet tested for this size of business.

· Things may be clearer once the road shows start. Even with LIC’s policyholder database of 25 crore and 1.2 million agents working feet on street, it will be tough to sell a Rs.90,000 crore IPO. It may call for out-of-the-box solutions at this point of time.