The ₹21,000-crore LIC Initial Public Offering (IPO), which is the most significant topic in the country will open to primary markets today. The issue closed on May 9. Through this IPO, the Centre has liquidated its 3.5 percent stake in the insurance behemoth.
The government has sold the stake completely through an offer for sale (OFS) of up to 22.13 crore shares for a 3.5 percent stake. 10 percent of the shares are secured for LIC policyholders and 0.7 percent for LIC employees. Also, 31.25 percent is secured for household (retail) investors.
Half of the issue is reserved for limited institutional buyers, while 15 percent is secured for non-institutional investors. The price bar has been set at ₹902-949 and the lot size is 15 shares. Bids can be created for a minimum of 15 shares and in multiples of 15 shares thereafter.
A discount of ₹45 per equity share will be presented to the Retail Individual and Eligible Employee Category and of ₹60 per share to the Eligible PolicyHolder Category of investors.
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Things to Know About LIC IPO
Here, we mentioned some important factors regarding LIC IPO you need to know.
When will LIC IPO open for subscription?
LIC IPO has opened for subscription between May 4 (Wednesday) to May 9 (Monday).
What is the price band for LIC IPO?
The company has sold its shares in the range of Rs 902-949 per equity share. Yet, it would propose a Rs 60 discount to policyholders and Rs 45 to retail investors and employees.
What is the issue size of LIC IPO?
The government will increase about Rs 20,557 crore via the initial public offering, which is short of earlier projections of about Rs 60,000 crore. Yet, despite the truncated size, it will still be the biggest ever IPO in India.
How much stake is LIC selling via IPO?
The issue is complete an offer for sale (OFS) by the government of India, which will offload 22.13 crore equity shares, aggregating to a 3.5 percent stake in the company. Earlier, the company was watching to offload a 5 percent stake in the company.
What is the lot size for LIC IPO?
Investors can bid for stakes in a lot size of 15 shares and multiples thereof. At the upper range of the price band, one lot of LIC will be worth Rs 14,235 crore, only of any discount.
How much percentage is reserved for policyholders in LIC IPO?
There is an employee reservation of 15.81 lakh shares while 2.21 crore shares are secured for policyholders. Retail and employees will bring a Rs 45 discount, while policyholders will get Rs 60 discount.
Half of the shares from the net issue are secured for qualified institutional buyers (QIB), 15 percent of the shares will be secured for non-institutional investors while the rest 35 percent is given to retail investors.
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When will LIC shares list?
Shares will be allocated to successful bidders on May 12, and the refund to unsuccessful bidders will be credited on the next day. Shares will be credited to the Demat account by May 16 and the stock is anticipated to list on the bourses on May 17.
What is LIC’s valuation?
The valuation of the state-run insurance is pegged at Rs 6 lakh crore. This valuation is approximately 1.12 times the ingrained value of Rs 5.4 lakh crore.
How profitable is LIC?
The AUM of LIC bounced about 10 percent to Rs 37,46,404.47 at the end of the financial year 2021 from Rs 34,14,174.57 crore in the previous year. The net profit of the company bounced to Rs 2,974.14 crore from Rs 2,710.48 crore during the period under consideration. For the period ended December 31, 2021, LIC had a total AUM of Rs 40,90,786.78 crore and noted a net profit of Rs 1,715.31 crore
How big is LIC?
LIC is the fifth biggest life insurer in the world by life insurance gross written premium (GWP) and the 10th largest insurer globally by total assets. At the end of FY21, LIC held a 66 percent market share in new business premium (NBP).
These are some important things to know about LIC IPO. You can know more about the topics regarding insurance and banking in our learning platform ENTRI Learning App.
