Through the LIC IPO, the government is looking to raise around Rs 21,000 crore by divesting a 3.5 per cent stake in the insurance giant.
New Delhi: The initial public offering (IPO) of the Life Insurance Corporation of India (LIC) will open on May 4, 2022, the government announced on Wednesday during a press briefing. The IPO will be available for subscription till May 9, 2022 and the price band has been set at Rs 902-Rs 949 per share.
The government also said that it is looking to raise around Rs 21,000 crore from the public issue by divesting a 3.5 per cent stake in the insurance giant.
Investors can bid for shares in a lot size of 15 shares, and then in multiples therof. As much as 1.58 crore shares have been reserved for employees while 2.21 crore shares will be reserved for policyholders. The government has reserved 10% of the issue size for policyholders and said they will get a discount of Rs 60 while employees and retail investors will get a discount of Rs 45.
The press briefing was attended by the board of directors of LIC and the company’s top guns like Chairperson M R Kumar and four Managing Directors namely Raj Kumar, Siddhartha Mohanty, Ipe Mini, and Bishnu Charan Patnaik were present at the event.
Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said that the LIC IPO is right sized, given the constraints in the market. He added, “The LIC IPO will not crowd out the capital and monetary supply in the market.”
Pandey further said that even after a reduced size of Rs 21,000 crore, the IPO will be the biggest ever in the country. Earlier, the IPO of One97 Communications, the parent firm of Paytm, was the biggest in India which garnered Rs 18,300 crore last year.
On the change in the valuation process, Pandey said, “Through an iterative process, we have worked out the valuation of 3.5% of the shares initially which we are divesting — a small number — but that value is embedded value which is future this.”
He added, “The DRHP was the numbers and thereafter, the number games start where all these numbers were analysed across the globe.”
LIC chairman M R Kumar said, “Now the time has come for LIC to be listed and I believe LICians will work together to make it a huge success. From now on we will call it LIC 3.0.”
He further said that LIC struggled in the first two decades to sell insurance in the country. It then started picking up steam from the 70s and 80s, “that was LIC 1.0”, Kumar said. He added that later LIC adapted to the competition and called it LIC 2.0.