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“LIC 3.0”: India’s biggest IPO to open in 1st week of May – 10 points

By Ruchi Upadhyay 
Updated Date

New Delhi: The wait for months for the country’s biggest IPO is over. Life Insurance Corporation on Wednesday in its press conference said the much-awaited issue of the state-run insurer is set to open on May 2 for anchors and on May 4 for subscription.

Also Read :- Centre extends IPO-Bound LIC Chairman's tenure by one year

The LIC has fixed a price band at Rs 902-949 per share for Rs 21,000 crore IPO. The IPO is likely to fetch Rs 21,000 crore to the exchequer. The government is planning to sell 3.5 per cent stake in the state-owned LIC. The IPO values LIC at Rs 6 lakh crore.

Beginning of “LIC 3.0”, says LIC Chairman M R Kumar, referring to India’s biggest public issue, which will be in the price band of ₹ 902-949, with a ₹ 60 discount to policyholders and a ₹ 45 discount for retail investors and employees.

This IPO is set to be biggest in the country despite its reduced offer size.

In February, LIC had filed draft papers with the Securities and Exchange Board of India (Sebi) wherein it had said that the government would sell 5 per cent stake or 31.6 crore shares in the insurer.

Also Read :- Govt shortlists Cyril Amarchand Mangaldas as legal advisor for LIC IPO

Here we list out important LIC IPO details in 10 points:

1] LIC IPO GMP: Shares of LIC IPO started trading in grey market on Monday at a premium of ₹25. LIC IPO GMP today is ₹48 that means grey market is expecting LIC IPO listing at around ₹997 ( ₹949 + ₹48), around 5 per cent higher from its issue price.

2] LIC IPO price: The GoI has fixed LIC IPO price band at ₹902 to ₹949 per equity share.

3] LIC IPO date for subscription: The public issue of insurance behemoth will open for subscription on 4th May 2022 and it will remain open for bidding till 9th May 2022.

4] Discount for LIC policyholders: The GoI has announced ₹60 per equity share discount to the applicants having an LIC policy. However, only those LIC policyholders will be eligible for this discount who bought their policy on or before 13th April 2022, the day LIC filed its DRHP at SEBI.

5] Discount for LIC employees: The GoI has announced ₹45 per equity share discount to LIC employees applying for the public issue.

6] LIC IPO size: The GoI aims to raise ₹21,008 from its public offer, which is 100 per cent OFS (offer for sale) in nature.

7] LIC IPO lot size: An applicant will be able to apply for the IPO in lots and one lot of the public issue comprises 15 LIC shares.

8] LIC IPO application limit: A bidder is allowed to apply for minimum one lot and maximum 14 lots of the LIC IPO.

9] LIC IPO listing: The public issue will list on both NSE and BSE and the tentative listing date of the public issue is 17th May 2022.

10] LIC IPO registrar: KFin Technologies Limited has been appointed as official registrar of the LIC IPO.

The valuation of the company, according to actuarial firm Milliman, is expected to be around Rs 5.4 lakh crore. However, according to the government’s intention of selling 3.5 per cent of its stake for Rs 21,000 crore, the valuation comes to be around Rs 6 lakh crore. The government is aiming to sell 3.5 per cent of its stake in the company for Rs 21,000 crore. For this, it will sell 22 crore shares of LIC. The date of the IPO was earlier decided to be before March 31. But it was put on hold due to high market volatility owing to the Russia Ukraine war. If the government does not launch the IPO by May 12, they will have to file a fresh LIC IPO DRHP (draft red herring prospectus) with the Securities Exchange Board of India (SEBI). The embedded value may also be affected.

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