Profectus Magazine

LIC; India’s Biggest IPO Opens For Retail Investors Today

By : Profectus Magazine   /   04 May 2022  /   News and Updates /   Latest News

Life Insurance Corporation’s (LIC) initial public offering for ₹20,557 crores is open for retail investors today. Being the biggest IPO to date in India investors are keen on it.

LIC is India’s largest insurance provider which plans to sell a 3.5 percent stake rather than five percent which was previously listed in Draft Red Herring Prospectus (DRHP).

Being the first player to enter the market with more than ₹20,000 crore listing, LIC will be listed on May 17. It is said to command a marketplace of ₹6 lakh crore or more which would make it the highest for any type of stock listing. Before opening up in the market, insurance firm approached their policyholders via SMS to give them a chance to hold their shares.

Here are a few things to know about India’s biggest IPO yet:

What is at stake?
LIC IPO will be offering about 22.13 crore worth of shares at a 3.5 percent stake. Half of the shares will be reserved for QIB (qualified institutional buyers). Out of the other 50, 15 percent will be offered to non-institutional investors and 35% is to be offered for retail.

Also read: LIC IPO: Most Awaited IPO

What is for employees/policyholders?

LIC has reserved about 15.82 lakh shares for their employees and about 2.21 crore shares will be reserved for the policyholders.

What will be the price band?

Price will be between ₹902 to ₹949 per share for the biggest IPO in India. Investors will be allowed to bid in lot sizes of 15 shares and multiples. This means that an investor will have to invest a minimum of ₹14,235.

Benefits for Employees/Policy Holders

LIC employees as well as its employees are entitled to a discount of ₹45 per share, whereas policyholders will get a discount of ₹60 per share.

Being the biggest IPO yet in India, LIC’s initial public offering will be taking subscriptions on Saturday to aiming to attract more investors as well as retail buyers. This IPO will be open till the 9th of May said the National Stock Exchange (NSE) via a release.

According to various reports, several experts have said that this is a bit unusual share sale, but seeing its size and keen interest from the investors LIC has been given an exception for the Saturday sale. They also said that this can input some additional pressure on the system but the Indian market infrastructure can facilitate this.

LIC isn’t just the big IPO the Indian market has expected this year. The title of biggest IPO on the market might be snatched away from it by Reliance Jio and Reliance Retail’s IPO which will be later this year. So far the second-largest IPO after LIC has been Paytm at ₹18,300 crores.

As of the first day of the IPO, LIC already raised about ₹5,620 crores as its anchor investor portion was fully subscribed. The share allotment is said to be announced on May 12 and the shares can be listed on the Bombay Stock Exchange as well as National Stock Exchange by May 17.



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