Life Insurance Corporation of India (LIC) is all set to open its much-awaited initial public offering (IPO) on May 4. The state-run insurer has fixed the price band in the range of Rs 902-949 per share for the public offer. To encourage the investors, the government has announced discounts for retail investors and policyholders.
All you need to know about LIC IPO date, price, discounts reserved quota and other details
LIC IPO Dates: Investors can start bidding for LIC IPO from May 4 to May 9. The issue will open for anchor investors on May 4.
LIC IPO Issue Size: The government is offloading 3.5 per cent of its share in LIC. So, around 21,000 crore shares of LIC will be up for sale during the offer. The size has been significantly reduced in the wake of Russia-Ukraine war and volatile condition in the stock markets across the world.
LIC IPO Price: The company has fixed the price range of Rs 902 to Rs 949 per equity share at face value of Rs 10 per equity share. There will be a discount of Rs 45 per share for retail investors and LIC employees. The policyholders will also get a discount of Rs 60 per share.
LIC IPO Lot Size: The LIC IPO market lot size has been fixed at 15 shares. A retail-individual investor can apply for up to 14 lots or 210 shares.
LIC IPO Quota: A significant portion of the upcoming LIC IPO, up to 22,137,492 equity shares or 10 per cent of the issue, has been set aside for the LIC policyholders, according to the Red Herring Prospectus (RHP). Up to 1,581,249 equity shares or 0.70 per cent of offer, has been reserved for eligible employees.
The state-insurer has reserved half of the net offer for the qualified institutional buyers (QIBs). Out of the QIB’s portion, 60 per cent has been set aside for anchor investors on a discretionary basis. One-third of the anchor investor portion will be allocated for domestic mutual funds. About 15 per cent will be earmarked to non-institutional investors (NII). Around 35 per cent will be available for retail investors to participate.
LIC Policyholders’ Quota Explained: LIC policyholders whose PAN is linked to the insurance policy as of February 28, 2022, will be eligible to apply for mega IPO. LIC policyholders can place a maximum bid of Rs 200,000 for the issue, net of discount to policyholders under the policyholders reservation quota. In case of LIC IPO policyholders quota gets oversubscribed, then the allotment will be done on a proportionate basis.
LIC IPO Valuation: On LIC IPO valuation, Yash Gupta-equity research Analyst, Angel One Ltd said, “The issue size of the IPO is Rs 21,000 crore with a valuation of Rs 6,00,000 crore. Earlier it was expected that the valuations will be around Rs 13,00,000 crore but now it will be around Rs 6,00,000 crore and embedded values are around Rs 5,40,000 crore, so the LIC IPO is valued at around 1.1 times of its embedded value. Private players are trading at around valuations of 2-3 times of embedded value. This Rs 6,00,000 crore LIC valuation looks Lucrative.”
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