The Life Insurance Corporation of India (LIC) on April 27 fixed its price band at ₹902- 949 per share for its Initial Public Offering (IPO) set to open on May 4.
There will be a ₹60 discount for LIC policy holders, while retail investors and eligible LIC employees will get a ₹45 discount, according to sources.
The IPO, through which the government is diluting sell 3.5% stake in State-owned LIC, will fetch ₹21,000 crore to the exchequer. The IPO has valued LIC at ₹6 lakh crore.
The anchor investor quota for the IPO will open on May 2. The IPO will close on May 9.
This will be the biggest ever IPO in India despite “right sizing” considering the current environment.
Earlier, the government had planned to sell 5% of its stake in LIC, amounting to 31.6 crore shares, and had filed draft papers to that effect with Securities and Exchange Board of India (SEBI). However, last week the government made the decision to reduce the issue size to 3.5%, following concerns about the fluctuating market caused by the Russia-Ukraine war.
It has filed papers seeking exemption from the 5% stake sale norm from SEBI, sources say. According to SEBI norms, companies valued above ₹1 lakh crore have to sell 5% of their stake in an IPO.
According to international actuarial firm, Milliman Advisors., LIC’s embedded value, i.e., a measure of the consolidated shareholders value in an insurance company, is at around ₹5.4 lakh crore as of September 30, 2021.
According to investor feedback, the market value of LIC is around ₹6 lakh crore- 1.1 times its embedded value.
(With inputs from PTI)
