Life Insurance Corporation of India (LIC) on Wednesday fixed its price band at Rs 902- 949 per share for its initial public offering (IPO) that opens on May 4.
According to sources, there will be a discount of Rs 60 for LIC policy holders, while Rs 45 for retail investors and eligible LIC employees.
The IPO, through which the government is selling a 3.5% stake in state-owned LIC, will fetch ₹21,000 crore to the exchequer. The IPO has valued LIC at Rs 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 IPO ever in India despite the ‘right size’ given the current environment
Earlier, the government had planned to sell its 5% stake in LIC, amounting to 31.6 crore shares, and had filed a draft letter to this effect with the Securities and Exchange Board of India (SEBI). However, last week the government decided to reduce the issue size to 3.5%, following concerns about a volatile market due to the Russia-Ukraine war.
Sources say it has filed papers seeking exemption from the 5% stake sale norm from SEBI. As per SEBI norms, companies worth more than Rs. 1 lakh crore is to sell its 5% stake in the IPO.
According to Milliman Advisors, an international actuarial firm, the embedded value of LIC, i.e., a measure of the value of consolidated shareholders in an insurance company, is around Rs 5.4 lakh crore as of September 30, 2021.
As per investor feedback, the market value of LIC is around Rs. 6 lakh crore- 1.1 times its embedded value.
With inputs from PTI