LIC IPO List, Price Range, Policyholder Discount; Key Details Investors Should Know

IPO of LIC: The highly anticipated initial public offering (IPO) of the Life Insurance Corporation of India is expected to be the largest ever in India, the Reserve Bank of India said in its March newsletter. “The IPO of LIC is expected to be the largest IPO ever in India, and hence, the right timing of the IPO is crucial,” the authors said in their article on the state of economy in the March edition of the newsletter, published by RBI’s Economics and Policy Research Department on March 17. “With 35% of the issue size reserved for retail investors, their response is critical to the success of LIC’s IPO.” However, as equity markets faced headwinds amid uncertainties surrounding the Russian-Ukrainian conflict, the Center decided to put its IPO decision on LIC on hold for some time.

Timing of LIC’s IPO is crucial

The insurance giant filed its document with Sebi on February 13, which indicated an OFS of up to 3,16,249,885 shares worth 5% of the capital. The RBI believed that the IPO of LIC presents a new opportunity to further deepen the reach of the stock markets. The RBI said, “The IPO of LIC is expected to be the biggest IPO ever in India, and therefore, the timing of the IPO is crucial.”

Not just for retail investors, but deepening capital markets is also vital for government divestment plans, the RBI said, adding that it is important to instill investor confidence in key investment institutions. market infrastructure.

The earlier plan to list the nation’s largest insurer was before the end of the current fiscal year. The government has until May 12 to launch the initial public offering without filing new documents with regulator Sebi, sources say.

Discounts for policyholders and retail buyers, price range details

According to a PTI report last week, the government plans to file the final documents for the initial public offering (IPO) of the LIC with the market regulator, the Securities and Exchange Board of India (Sebi). The final documents will offer details on discounts for policyholders and retail buyers, the price range and a total number of shares, according to the report. The issue is likely to have reservations for eligible employees and the company’s LIC policyholders, according to DRHP. One-third of the anchor portion will be reserved for domestic mutual funds.

With a 5% stake dilution, LIC’s IPO would be the largest in the history of the Indian stock market and, once listed, its market valuation would be comparable to that of leading companies such as RIL and TCS. So far, the amount raised from Paytm IPO in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at almost Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

According to the draft prospectus, the intrinsic value of LIC, which is a measure of consolidated shareholder value of an insurance company, was set at around Rs 5.4 lakh crore as of September 30, 2021 by the international actuarial firm Milliman Advisors.

Kotak Mahindra Capital Company, Axis Capital, BofA Securities, Citigroup Global Markets, Nomura Financial Advisory, Goldman Sachs (India) Securities, ICICI Securities, JM Financial, JP Morgan India Private Limited and SBI Capital Markets are the leading book managers for the issue . On the other hand, KFin Technologies Private Limited is the registrar of the offering.

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