LIC IPO Expected To Be Priced Under Rs 950; Policy Holders Can Get Flat Rs 60 Discount!
The most awaited LIC IPO price band is likely to be set at Rs 902-949 a share and may offer a discount of Rs 60 to the policyholders.
LIC IPO Price Band
For the Retail investors and the employees of LIC, may get a discount of Rs 45 on subscribing to the shares of India’s largest insurer, according to a senior government official.
Further, the board of LIC has approved the discount to be offered to the three categories, reservations for policyholders and employees, and the issue dates.
Through the offering, the center is planning to sell 221.3 million shares, or 3.5 per cent stake, in LIC.
The move would help the government to garner Rs 21,000 crore, valuing the insurer at Rs 6 trillion.
Reduction In Issue Size
Officials said that the Securities and Exchange Board of India has approved the reduction in the issue size.
The market regulator needed an exemption on lowering the issue size.
Because, the existing guidelines mandate a minimum offering of 5 per cent equity and Rs 5,000 crore worth shares for companies valued over Rs 1 trillion.
The officials confirmed that “All regulatory approvals for LIC’s IPO are now in place,”.
Reserved Quota In LIC IPO
In this offering, around 10 percent of the issue size, or 22.1 million shares, may be reserved for LIC policyholders.
Similarly, 1.5 million shares would be reserved for its employees.
After exclusion of the reservations, the remaining 50 percent shares would be allocated to qualified institutional buyers (QIBs), 35 percent to retail investors, and 15 per cent to non-institutional bidders.
The officials said that almost 60 percent of the QIB quota has been reserved for anchor investors.
The Center had reserved 10 percent of the issue for LIC policyholders and had made provisions for the same in the LIC Act saying that “Policyholders have played an important role in LIC’s journey and growth. The unanimous view, within the government, was to offer them a higher discount as a reward, for availing the issue,”.
So far, LIC has over 10.8 million policyholders who have linked their policies with PAN and have a demat account.
The officials said that the center is hoping that most of these eligible policyholders would avail the reserved quota in the IPO.
LIC IPO Issue Date
Coming to the LIC IPO launch date, it would open on May 2 for anchor investors, and on May 4 to May 9 for the public.
The officials said that the red herring prospectus (RHP) for the issue would be filed on Tuesday night, or latest by Wednesday morning.
It looks like that the insurer is all set to formally announce the details of the IPO on Wednesday.