New Delhi: On Wednesday, May 4, 2022, the much-anticipated initial public offering (IPO) of life insurance behemoth Life Insurance Corporation of India (LIC) will open for subscription.
The LIC IPO, valued at over Rs 21,000 crore, will be open for subscription until Monday, May 9, 2022, with a price band of Rs 902-949 per share.
The Life Insurance Corporation of India (LIC) is the country’s oldest and largest life insurance company. On September 1, 1956, it was founded by merging and nationalising 245 private life insurance companies, with an initial capital of Rs 5 crore. LIC is the fifth-biggest life insurer in the world and the country’s largest asset manager, with assets of roughly Rs 40 lakh crore.
It has a market share of 61.6 percent in terms of premiums or GWP, 61.4 percent in terms of New Business Premium, 71.8 percent in terms of number of individual policies issued, and 88.8 percent in terms of number of group policies as of December 31, 2021, with 1.33 million individual agents.
It is owned by the government, which will sell 22.13 crore (22,13,74,920) shares in the public offering, or 3.5 percent of its investment in LIC. The IPO is purely an offer-for-sale (OFS), with the government expecting to raise more than Rs 21,000 crore from it.
As a result of the Russian invasion of Ukraine and continued selling by foreign portfolio investors (a net of Rs 1,48,078 crore since the beginning of December 2021), the size of the IPO was reduced from Rs 65,000 crore to Rs 21,000 crore. Despite this, the LIC IPO would be the country’s largest public offering, surpassing the Rs 18,300 crore raised by Paytm last year.
Last week, the company announced a discount of Rs 60 per share for policyholders and Rs 45 per share for retail investors and LIC staff at the IPO announcement.
Qualified institutional buyers (QIBs) will receive half of the issue size, retail investors will receive 35%, and non-institutional investors would receive 15%.
Investors interested in subscribing to the LIC IPO might do so in lots of 15 equity shares and then in multiples. They will have to pay Rs 14,235 (excluding discounts) for a single lot of LIC at the top price band. Both the BSE and the National Stock Exchange will list the shares (NSE).
Applicants should also keep in mind that the UPI mandate confirmation deadline is Tuesday, May 10, 2021, at 12:00 p.m. If they do not comply, their application may be rejected.
The issue’s book running lead managers are Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, Citigroup Global Markets India, Nomura Financial Advisory and Securities India, Goldman Sachs India Securities, ICICI Securities, JM Financial, JP Morgan India, and SBI Capital Markets, while the issue’s registrar is KFin Technologies.
The anchor component will be available for subscription today, May 2, 2022, before the IPO.