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LIC IPO will be hitting the market between May 4 and May 9; Know the expected value and other things

by Shatakshi Gupta
by Shatakshi Gupta
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The Life Insurance Corporation of India’s much-anticipated Initial Public Offering (IPO) is expected to begin accepting subscriptions on May 4th. The Securities and Exchange Board of India (SEBI) approved the Life Insurance Corporation of India’s IPO application last month. The company has submitted the Draft Red Herring Prospectus to the Securities and Exchange Commission.

Things to know:

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  • The government, which controls the insurance behemoth entirely, proposes to sell a 3.5 percent stake in the company from 4 to 9 May.
  • Due to market conditions, LIC has reduced the size of its initial public offering (IPO) from 5% to 3.50%. At a board meeting on Saturday, a proposal to cut the size of LIC’s IPO to 3.5 percent from the intended 5% in its Draft Red Herring Prospectus (DRHP) was tabled and agreed upon.
  • On April 26, CNBC TV18 learned from government sources that the pricing band for Life Insurance Corporation of India’s (LIC) initial public offering has been fixed at Rs 902 to Rs 949, with a rebate of Rs 60 for policyholders.
  • Employees and retail investors will receive a discount of Rs 45 per share, while LIC policyholders will receive a discount of Rs 60 per share.
  • The remaining shares distribution pattern will be distributed- 50% to qualified institutional buyers (QIBs), 35% to retail buyers, and 15% to non-institutional investors, in addition to policyholders and shareholders.
  • LIC received ₹13,000 crores worth of investment commitments from anchor investors, more than twice the value of shares offered to such investors, Mint reported citing sources.
  •  According to the government’s latest estimations, LIC is worth $6 trillion, or just 1.1 times its original embedded value of $5.39 trillion. The embedded value, on the other hand, could be altered in the modified IPO filings that the government filed with SEBI on Monday.
  •  The LIC IPO will bring in Rs 21,000 crore for the government by selling around 22 crore shares.
  • The government had planned to float LIC in the previous fiscal year, which ended March 31, but had to postpone the sale after the Russia-Ukraine conflict caused a market meltdown.

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