The state-owned Life Insurance Corporation of India (LIC), the country’s largest insurance company, could launch its initial public offering (IPO) in the first week of March 2022.
LIC has filed the draft red herring prospectus (DRHP) of the upcoming (IPO) of Life Insurance Corporation (LIC) with market regulator SEBI. LIC’s IPO will be the biggest stock market listing in the nation’s history.
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Here are the details of the LIC IPO for investors:
LIC IPO Size: The government of India owns a 100% stake in the Life Insurance Corporation of India. The forthcoming LIC IPO will be a complete offer for sale (OFS) as the government is planning to dilute a 5% stake or 316,249,885 equity in LIC.
“The IPO is 100% OFS by GOI and no fresh issue of shares by LIC. For filing valuation about 31.6 cr shares are on offer representing 5% equity,” tweeted Tuhin Kanta Pandey, secretary, department of investment and public asset management (DIPAM).
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LIC IPO Valuation: LIC IPO’s embedded value came in at around Rs 5.39 lakh crore as of September 30, 2021. The valuation of LIC IPO will be three to four times the embedded value.
LIC IPO Allocation for Anchor Investors: According to the draft paper, LIC is likely to reserve 60% of the Qualified Institutional Buyers portion for anchor investors on a discretionary basis. One-third of the anchor investor portion will be reserved for domestic mutual funds. If the anchor investor quota remains unsubscribed, the shares left out will be added to the Net QIB Portion.
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LIC IPO Quota for QIB, NII and Retail Investors: The insurance firm will keep aside 50% of LIC IPO for QIBs, 15% for non-institutional investors (NII) and 35% for retail investors.
Allocation for Policyholders and Employees: LIC has over 2.9 crore policyholders and around 13 lakh agents. LIC’s quota for its policyholders will be a first-of-its-kind. The central government has allowed a 10% quota for policyholders at a discounted price. A certain portion will also be reserved for employees at a discounted price.