InvestorQ : Can you tell me some of the key highlights of the LIC IPO that is expected to open in the month of March 2022?
Arusha Ray made post

Can you tell me some of the key highlights of the LIC IPO that is expected to open in the month of March 2022?

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diksha shah answered.
3 months ago
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India’s largest and most dominant life insurer, is close to launching its maiden IPO in the Indian market. Currently, LIC has 74% share of new business premium and 70% share of new policies sold. What is more its assets under management or AUM is more than the entire mutual fund industry put together. Here are some highlights of its forthcoming IPO. These dates and numbers are still tentative based on reports, yet to be confirmed by DIPAM.

1) LIC IPO will open on 10-Mar or on 11-Mar and will remain open till 14-Mar or 15-Mar, with both the days being inclusive. We await final clearance on the subject.

2) Based on market value estimates, the total size of the IPO is pegged at Rs.66,500 crore, which will value LIC overall at over Rs.13 trillion, or a tad below $200 billion.

3) Pricing and price band is yet to be confirmed but based on the number of shares and the value raisable, the price band is expected in the range of Rs.2,000 to Rs.2,100 for IPO.

4) Government of India will issue a total of 31,62,49,885 shares (31.63 crore shares approximately) to raise Rs.66,500 crore at the upper end of the price band.

5) Reservation for LIC policyholders, on per individual basis, will be to the tune of 3.16 crore shares or 10%. LIC has 28.3 crore policyholders who are currently active.

6) While the policyholder quota is expected to get a discount of 10%, the government is also likely to offer a discount of up to 10% for employees of LIC with 5% reservation.

7) Policyholders will get reserved 3.16 crore shares and employees 1.58 crore shares under the special quota and the 10% discounted price would be around Rs.1,890 per share.

8) It is estimated that the market lot for investing in the LIC IPO will be of 7 shares and in multiples. Maximum retail investment will be pegged at 13 lots of Rs.191,100 crore.

Category

Shares Quota

Allotment price

Policy Holders of LIC

3.16 crore shares

Rs.1,800 (10% discount)

Employees of LIC

1.58 crore shares

Rs.1,800 (10% discount)

Anchor Allocation

8.06 crore shares

No discount

QIB Allocation (net of anchor)

5.37 crore shares

No discount

NII / HNI allocation

4.03 crore shares

No discount

Retail Investors

9.41 crore shares

Not yet finalized

The final details of the LIC IPO are yet to be made public and the above details are based on the judgement of the investment bankers and media reports.

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