Waiting for LIC IPO is over: LIC issue will open on May 4, price band of Rs 902-949 per share

Credit: Amar Ujala

Life Insurance Corporation of India (LIC) has fixed a price band of Rs 902-949 per share for its Rs 21,000 crore initial public offering (IPO). In IPO, policyholders will get a discount of Rs 60 and retail investors and employees will get a discount of Rs 45. This has been claimed in some media reports.

The report says that the IPO will open on May 2 for anchor investors and from May 4 to 9 for the rest. 10% of the issue (2.21 crore shares) is reserved for policyholders and 0.15 crore shares for eligible employees. The government wants to raise around Rs 21,000 crore by selling 3.5% stake (22 crore shares) in LIC.

LIC to file RHP on April 27

According to media reports, the Securities and Exchange Board of India (SEBI) on April 25 had given its approval to the updated draft red herring prospectus, which had details of stake sale at 3.5% instead of 5%. Now the red herring prospectus will be submitted by April 27.

Road shows in 6 cities

On the other hand, LIC management and investment bankers will conduct road shows in Mumbai, New Delhi, Bengaluru, Ahmedabad, Rajkot, Kolkata, where they will meet potential investors and analysts from Wednesday. The roadshow will continue till the end of this week. Apart from this, online road shows will also continue.

IPO launch was planned by March 2022

The government's plan was to launch the IPO by March 2022, but due to the Russia-Ukraine war, the market sentiments turned negative and the government went into wait and watch mode. Now when the market improved again and the sentiments turned positive to some extent, the government again started preparing to bring the IPO.

Earlier this month, the government also amended the FDI rules to allow 20% foreign direct investment (FDI) in LIC.

Biggest IPO will be

LIC's issue will be the biggest IPO ever in the Indian stock market. Government can raise Rs 21,000 crore by selling 3.5% stake in LIC. After listing, the market valuation of LIC will give competition to the top companies. Prior to this, the issue of Paytm was the biggest and the company had raised Rs 18,300 crore from IPO last year.