LIC IPO: Price band fixed at Rs 902-949, Rs 60 disc for policyholders: Sources
New Delhi: The much-awaited IPO of India's largest state-owned insurance provider Life Insurance Corporation (LIC) is set to open from May 4 to May 9 for investors. The price band for the LIC IPO has been set between Rs 902 to Rs 949, with a discount of Rs 60 for LIC policyholders, for retail and employees, the discount will be of Rs 40, according to the govt sources.
The upcoming Initial Public Offering (IPO) of LIC is one of the largest IPO in the country.
IPO size reduced
The size of the LIC IPO has been reduced. The government will now sell only 3.5% stake in the issue of LIC. An official with knowledge of the matter said that the government is preparing to raise Rs 21,000 crore by selling 3.5% stake of the state-owned behemoth insurance provider.
Earlier the government was planning to sell 5% stake. However, if the demand for the issue is good in the market, then this limit can be increased from 3.5% to 5%.
LIC's valuation Rs 6 lakh crore
The government will raise Rs 21,000 crore by selling 3.5% stake. Accordingly, the valuation of LIC is Rs 6 lakh crore. Although earlier the government had estimated the market value of LIC to be around Rs 17 lakh crore.
10% share reserve for policyholders
As per DRHP, 10% share will be reserved for LIC policyholders under the reservation portion. Maybe they can get a discount of 5% in the share price.
LIC's issue will be the biggest IPO ever in the Indian stock market. The government can raise Rs 21,000 crore by selling some stake in LIC. After listing, the market valuation of LIC will compete with top companies like RIL and TCS. Prior to this, Paytm's issue was the biggest and the company had raised Rs 18,300 crore from IPO last year. However, The Govt is in dilemma to bring the IPO or not in the volatile market due Russia-Ukraine war.