LIC IPO to open May 4, govt to sell 3.5% stake, up to 22 crore shares on offer, Price Band Rs 902-949

LIC IPO (Image: Canva)

In Budget 2021, Finance Minister Nirmala Sitharaman said that LIC’s IPO will come in the financial year 2021-22. The issue date of India’s biggest IPO (Initial public offering) LIC has been released.

LIC’s IPO will be open on Wednesday 4th May 2022 and will close on Monday 9th May 2022. Earlier, India’s biggest IPO was Coal India’s IPO whose issue size was 15314 crores.

LIC’s first DRHP was filed with SEBI in February 2022, then there was a plan to sell 31.6 crore shares in a 5% stake. But after the Russian invasion of Ukraine, the market faced volatility due to which LIC’s IPO was postponed.

The plan to sell a 5% stake has now been reduced to 3.5% equity and the plan to sell 31.6 crore shares has been reduced to around 22 crore shares.

Policyholders of Life Insurance Corporation of India (LIC) have a sovereign guarantee which is a major selling point of LIC policies. LIC has a market share of 67.82% in the Life Insurance Sector and currently, LIC serves 30 crore policies and the company has 22.5 lakh agents.

The IPO for the anchor investor will be open from May 2, 2022. The price band of the IPO is Rs 902 to Rs 949 per share where a lot will be of 15 equity shares.

Government-owned insurance company LIC is selling over 22.13 crore shares with a total IPO value of ₹21,000 crores. According to sources, if you are a policyholder of LIC, then you will also get a discount of Rs 60 per share.

About 2.21 crore shares will be reserved for LIC policyholders at 10% of the offered size while for employees about 15.81 lakh shares, 5% of the post-offer equity share capital will be reserved.

Employees and retail investors will also get a discount of Rs 45 per share. LIC’s valuation is almost being made up to Rs 6 lakh crore on the upper band.

LIC’s P/E ratio on the upper price band is 201.91 which is higher than the industry P/E of 79.77. Through this IPO the government wants to raise almost Rs 21000 crore by selling its 3.5% stake to about 22 crore shares.

Over 2.96 crore shares have been reserved for non-institutional buyers while over 9.88 crore shares have been reserved for qualified institutional buyers.

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