LIC IPO to open on May 4, issue price fixed at Rs 902-949

Life Insurance Corporation of India (LIC) is set to launch its initial public offering (IPO) from May 4 to May 9 to the general public. For the anchor investors, the issue opened on May 2.

The price band for the issue is Rs 902-949 per share, at a face value of Rs 10 each.

For policyholders, 10% of the LIC IPO is reserved and they will get a discount of Rs 60 per share on the issue price. Retail investors and employees will be given a discount of Rs 45 per share. The employee reservation portion will be 5% of the post-offer equity share capital.

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The issue will be managed by 10-book running lead managers including Kotak Mahindra Capital, SBI Caps, ICICI Securities, Goldman Sachs, JM Financial, Axis Capital, JP Morgan, Nomura, Citigroup, and Bank of America Securities.

The allotment of shares to the Demat account of bidders will happen by May 16, after which LIC would commence trading of equity shares in the stock exchanges and list “on or about May 17”.

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On April 23, the LIC board approved a revised IPO issue size to 3.5% from 5%. The government will now sell 3.5% of its stake in LIC for Rs 21,000 crore, valuing the company at Rs 6 trillion.

LIC’s IPO will be the largest in India so far. The revised issue size of Rs 21,000 crore will be larger than the amount raised from the IPO of Paytm in 2021 – which is the largest ever currently 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.

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Previously, the government was aiming to raise over Rs 60,000 crore by selling around 31.6 crore shares or a 5% stake in the insurance behemoth to reach the disinvestment target of Rs 78,000 crore.

The stake sale was initially planned to be launched in March 2022, but the plans were deferred due to the Russia-Ukraine crisis as stock markets were highly volatile.

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LIC reported a profit after tax (PAT) of Rs 1,713.3 crore in the nine months of the financial year 2022. Its revenue stood at Rs 5.1 lakh crore. It has an investment of Rs 38.4 lakh crore towards policyholder’s funds and the company is debt-free as of December 31, 2021.