Life Insurance Corporation of India (LIC) is all set to announce the offer price and discounts for its policyholder and retail investors of its initial public offering (IPO) on Wednesday. The much-awaited LIC IPO is expected to be priced in the range of Rs 902-949 per share, according to the sources. LIC policyholders will be able to avail a discount of Rs 60 per share, the sources confirmed. The discount for retail investors and employees has been fixed at Rs 45 share.
With 30 crore policyholders and the highest market share — 61 per cent in new business premium and 71 per cent in terms of the number of policies — LIC is the oldest and most trusted brand when it comes to insurance products. From insurance plans to money-back schemes to endowment policies, it offers a wide range of products for different age groups and types of customers. As the state-owned insurance company is preparing to go public, here is all you need to know about mega LIC IPO
LIC IPO Dates
LIC IPO is all set to open on May 4 and will close on May 9. The anchor book of LIC IPO is expected to open on May 2, according to the sources.
LIC IPO Price
The price band for mega LIC IPO has been fixed at Rs 902-949 per share. The discount for policyholders is expected to be Rs 60 and for retail investors and employees at Rs 45 per share, according to the sources.
LIC IPO Quota
In a bid to encourage the policyholders to invest in LIC IPO, the government has set aside 10 per cent of the issue for the policyholders. A significant amount of will also be reserved for LIC employees, according to the sources.
Around half of the remaining IPO issue will be reserved for the qualified institutional buyers (QIBs). Out of the QIB’s portion, 60 per cent has been earmarked for anchor investors on a discretionary basis. One-third of the anchor investor portion will be set aside for domestic mutual funds. About 15 per cent will be allocated to non-institutional investors (NII). Around 35 per cent will be available for retail investors to participate.
LIC IPO Issue Size
Life Insurance Corporation of India’s board has recently reduced the size of LIC IPO to 3.5 per cent from 5 per cent proposed in its draft red herring prospectus (DRHP). The government will now sell its 3.5 per cent equity in LIC for Rs 21,000 crore valuing India’s largest insurer at Rs 5.4 lakh crore. The decision was taken considering the market volatility in the wake of Russia-Ukraine crisis.
The central government earlier wanted to launch the LIC initial public offering in March 2022 to meet its revised disinvestment target for the previous fiscal. However, the Russia-Ukraine war and its impact on the stock markets worldwide, had delayed the plan. The issue size has also been significantly cut to sail through the IPO in the current market conditions.