On Wednesday, the Life Insurance Corporation of India (LIC) will disclose the offer price and concessions for policyholders and retail investors in its first public offering (IPO). According to sources, the much-anticipated LIC IPO will be priced in the range of Rs 902-949 a share. According to the sources, LIC policyholders will receive a discount of Rs 60 per share. The retail investor and employee discount have been set at Rs 45 per share.
LIC is the oldest and most trusted brand in the insurance industry, with 30 crore policyholders and the biggest market share – 61 percent in new business premiums and 71 percent in policy numbers. It offers a wide selection of solutions for different age groups and types of customers, ranging from insurance plans to money-back schemes to endowment policies. Here’s all you need to know about the big LIC IPO as the state-owned insurance business prepares to go public.
LIC IPO DATE
The LIC IPO is scheduled to begin on May 4 and end on May 9. According to sources, the anchor book for the LIC IPO will open on May 2.
Price of the LIC Initial Public Offering
The huge LIC IPO price band has been set at Rs 902-949 per share. According to sources, policyholders will receive a reduction of Rs 60 per share, while retail investors and employees will receive a discount of Rs 45 per share.
LIC IPO QUOTA
The government has set aside 10% of the issuance for policyholders in an effort to encourage them to engage in the LIC IPO. According to the sources, a major portion will be set aside for LIC staff.
Qualified institutional buyers will receive around half of the remaining IPO issue (QIBs). On a discretionary basis, 60% of the QIB’s portion has been set aside for anchor investors. Domestic mutual funds will receive one-third of the anchor investor portion. Non-institutional investors will receive about 15% of the funds (NII). Retail investors will be allowed to participate in about 35% of the offering.
LIC IPO ISSUE SIZE
The board of the Life Insurance Corporation of India recently decreased the amount of the LIC IPO from 5% to 3.5 percent in its draught red herring prospectus (DRHP). The government will now sell its 3.5 percent stake in LIC for Rs 21,000 crore, valued at Rs 5.4 lakh crore. The decision was made in light of the market instability that has resulted from the Russia-Ukraine situation.
To reach its revised disinvestment target for the previous fiscal year, the central government had planned to conduct the LIC initial public offering in March 2022. The plan had been postponed due to the Russia-Ukraine conflict and its global impact on stock markets. In order to get through the IPO in the current market conditions, the offering size has also been reduced significantly.