The Life Insurance Corporation (LIC) announced via its press conference on Wednesday that it will launch its initial public offer (IPO) on May 4 for retail investors. This issue will come to a close on May 9 2022.
The LIC IPO will be listing shares in the price band of ₹902-949, as decided by the government of India. A stake of 3.5%, reduced from the earlier proposed 5%, will be up for sale in the market.
A total amount of 22.13 crore shares are said to be issued to raise ₹20,557 crores. It is much lesser than the earlier projection of ₹60,000 crores.
LIC has made it clear that investors can only bid in multiples of 15 for the shares in the IPO. A total of 15.81 lakh shares are reserved for the employees of Life Insurance Corporation, while 2.21 crore shares are reserved for the LIC policyholders.
Retail investors and LIC employees will get a ₹45 discount, and the policyholders will get a discount of ₹60. The initial public offer will value LIC at a massive ₹6.07lakh crores.
Anchor investors or qualified institutional buyers are entitled to acquire half of the LIC shares in IPO. 15% of total shares in IPO are reserved for non-institutional investors, while the rest is up for sale to retail investors.
The government has reduced the size of the LIC IPO so that it does not overwhelm the market. However, it is still India’s largest-ever initial public offer, surpassing the PayTm IPO that amounted to ₹18,300 crores.
The successful bidders will be allotted their shares on May 12, and the unsuccessful bidders will get the refund amount credited into their accounts on the same day. The shares will start to appear in the Demat accounts by the end of May 16, and from May 17, the LIC shares will begin to trade in the secondary market.
Record opening of Demat and trading accounts is expected in the upcoming day owing to LIC IPO. Analysts predict that a massive mobilisation of users is expected for the IPO, which will bring a large number of new investors into the market.
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