The LIC IPO will open on May 4 and close on May 9. The IPO is entirely an offer for sale by the Government of India. LIC will raise Rs Rs21,257 crore via the IPO.
The price band for the much-awaited initial public offering (IPO) of the state-run insurance behemoth Life Insurance Corporation of India (LIC) has been set at Rs 902 to Rs 949, with a discount of Rs 60 for policyholders.
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For retail and employees, the discount will be of Rs 40. At the new rate, the government could raise $2.61 billion at the lower end of the price band.
LIC's IPO is set to open from May 4 to May 9. It will open for the anchor tranche on May 2, 2022.
There are currently 24 life insurance companies in India, with LIC being the sole public player. The company's promoter is the President of India, acting through the Ministry of Finance.
The embedded value of LIC as of September 30, 2021, is Rs 5.4 trillion. LIC shares will list on the bourses upon successful completion of the IPO.
Transaction entirely via offer for sale
The government owns a 100 percent stake in LIC, whose total equity is around 632 crore shares. The issue size of the IPO is 22.13 crore shares, which is 3.5 percent of the total number of shares.
LIC will raise Rs 21,257 crore via the IPO. Its valuation is at Rs 6.07 lakh crore. The IPO is entirely an offer for sale by the government of India and no fresh issue of shares by LIC.
The price band is Rs 902/- to Rs 949/- and the bid lot size is 15 shares.
The employee reservations will be 0.15 crore shares, while the policyholder reservation portion will not exceed 10 percent of the issue size – 2.21 crore shares.
The remaining shares are to be allocated in the ratio of 50 percent QIBs, 35 percent retail and 15 percent NIIs.
Under QIBs, 60 percent of shares are reserved for anchor investors. The discount for policyholders would be Rs 60 and for retail as well as employees it would be Rs 45.
Objectives of offer
The objectives of the offer are to achieve the benefits of listing the equity shares on the stock exchanges and carry out the offer for sale by the selling shareholder (President of India).
The selling shareholder will be entitled to the entire proceeds of the offer after deducting the offer expenses and relevant taxes thereon.
First Published: IST