LIC IPO: Top 5 things to know before subscribing to the issue on May 4

The largest life insurance company in India, Life Insurance Corporation of India (LIC), will undertake its initial public offering (IPO) on May 4, the largest in the Indian capital market’s history.

Date of the IPO

The offer will be accessible for subscription on May 4 (Wednesday), and the deadline to subscribe is May 9. (Monday). 

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Price Band of the IPO

The price range for the offer is Rs 902-949 per equity share with a face value of Rs 10 each. However, LIC would provide a discount of Rs 60 to qualified policyholders, while retail investors and employees will receive a discount of Rs 45.

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IPO details

By selling 3.5% of its stake in the insurance behemoth, the government of India seeks to raise Rs 21,000 crore at the upper end of the price range. The IPO is fully an offer-for-sale of 221,374,920 equity shares, with the government receiving the whole proceeds. Up to 1,581,249 units of the shares on the block are allocated for employees, and up to 22,137,492 units are held for policyholders.

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From the overall offer size, qualified institutional purchasers will get 50% of the net offer, retail investors will receive 35%, and non-institutional investors would receive the remaining 15%. After the offer, the Government of India’s shareholding in the corporation would be reduced to 96.5% from its current ownership of 100%.

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IPO lot size

Investors can bid for a minimum lot size of 15 shares and multiples of that amount. For Rs 1,99,290, a retail investor can apply for up to 14 lots or 210 shares. The maximum bid amount has been set at Rs 2 lakh for retail investors, LIC employees, and LIC policyholders.

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Grey Market Price (GMP), allotment and listing date

According to IPO Watch, the company’s shares are presently fetching a premium of Rs 85 per share in the grey market, representing a 10% listing gain.

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Shares will be allocated to successful bidders on May 12, and refunds will be paid to unsuccessful bidders’ accounts on May 13. The successful bidders’ shares will be credited to their Demat accounts by May 16, and the stock will begin trading on the exchanges on May 17.