LIC IPO: Price band fixed at Rs 902-949, Rs 60 discount for policyholders

The price band for the initial public offering (IPO) of
Life Insurance Corporation of India (LIC) has been fixed at Rs 902 to Rs 949,
with a discount of Rs 60 for policyholders, reported CNBC TV18.

Retail buyers and employees will get a discount of Rs 40,
the report said. The LIC IPO is expected open on May 4, and the issue is likely to
close on May 9.

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The anchor book for the public issue is expected to open
on May 2 and there will be no greenshoe option in the IPO.

The Securities Exchange Board of India (SEBI) on April 25
approved the updated draft red herring prospectus (DRHP), which lists a 3.5%
stake sale instead of 5% as mentioned in the earlier draft papers.

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The updated DRHP was submitted before the SEBI last week.
The government, which owns a 100% stake in the insurance behemoth, plans to raise
an amount of Rs 21,000 crore by selling around 22 crore shares or a 3.5% stake.

The red herring prospectus will be submitted before the
market regulator by April 27, the CNBC TV18 report added.

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The seeking Rs 21,000 crore for the revised holding on the
block, the Centre is targeting a valuation of Rs 6 trillion for the insurer.

The LIC IPO is crucial to the centre’s plan to reach its
disinvestment targets. The government has fixed disinvestment receipts at Rs
65,000 crore for Rs 2022-23, up from Rs 13,531 crore in the previous financial
year.

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The first DRHP related to the IPO was submitted before
the SEBI in February 2022, when the government had said it plans to 31.6 crore
shares in a 5% stake sale in the state-run insurance company.

However, the IPO plans were deferred due to volatile
market conditions following the Russian Invasion of Ukraine.

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The public issue size of the insurance giant at Rs 21,000
crore is larger than the amount raised from the Paytm IPO in 2021 at Rs 18,300
crore, followed by Coal India in 2010 at nearly Rs 15,500 crore and Reliance
Power (2008) at Rs 11,700 crore.