The government is expected to raise >75,000 Cr by selling part of its stake in the insurance behemoth LIC.
The issue size is so big that even the word big does not seem to capture the essence of how big it is!
A thread by Bhaskar & me.
Some numbers to put things in context- 1. The biggest IPO yet was by One97 Communications (Paytm), which raised just about 18,000 Cr; LIC IPO size is at least 4x.
2. The mutual funds SIP flows/month are upwards of 9,000 Cr; LIC hopes to raise >8x of this amt in 2 days!
3. There are 10 Indian states whose budget size is less than the LIC IPO size.
The govt is tweaking some rules in this IPO. Ex, rules tweaked for FII invst in the IPO. Investors are given a period of 2 days to invest in an IPO; however, looking at the issue size of LIC's IPO, this period is most likely to be increased.
Hopefully, this rule tweaking won't create a negative precedent in the well-regulated capital market of India.
Fun fact: The money raised by LIC will not be used by the company, but will be transferred to the GOI's wallet. #insurance#lic#ipo#investing#nifty50
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@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad Insightful session👍
Does AUM matter in MF scheme?
Short Summary (do add/edit)
higher, lower is wrt avg fund size of d resp product category 1. Debt- higher the better coz some portion is kept as liquid 2. Largecap- lower the better coz higher aum funds start copying index
1/n
@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad 3. Smallcap- lower the better coz fund can higher bets in stocks where she has conviction. 4. The issue of AUM is more serious in equities mainly coz of liquidity. As you go from largecap to smallcap, the market cap decreases and so does the liquidity.
2/n
@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad 5. the largest smallcap fund has an AUM of 20k Cr and d largest smallcap company has a market cap of 16k Cr 6. if u were to decide ven to exit ur investment, a gud pointer is-start redeeming some portion of ur investments as soon as u get closer to achieving ur financial goal.n/n