The Initial Public Offering (IPO) of Life Insurance Corporation of India (LIC), the country’s largest ever insurer, witnessed full subscription of the retail segment for the third day on Friday. The overall issue was subscribed 1.38 times. LIC has fixed the price band: 902-949 per equity share for issue.
LIC IPO Will be open for subscription even on weekends to enable people to participate in the mega share sale. The issue will close on Monday, May 9, 2022.
As per market observers, LIC shares are available at Premium (GMP) 42 in the gray market today. The share allotment is expected on May 12 and the shares of the company will be listed on the stock exchanges BSE and NSE on Tuesday, May 17, 2022.
The government aims to generate approx. 21,000 crore by reducing the 3.5% stake. LIC reduced its IPO size by 5% due to prevailing market conditions. Despite the reduced size of approx. 20,557 crore, LIC IPO is going to be the biggest ever public offering in the country.
“Given the low penetration of insurance and improving financialization of savings, we expect LIC to maintain its market leadership position supported by strong business traction. We believe investors should subscribe to IPOs for the long term, as we believe the structural story for the life insurance industry remains intact as uncertainties during the pandemic highlight the benefits of life insurance.” B Gopakumar, MD & CEO said. Axis Securities.
The offer includes reservation for eligible employees and policyholders. Retail investors and eligible employees will get discount 45 per equity share, while policyholders will get a discount 60 per share.
“The embedded value of LIC, which is a measure of the value of a consolidated shareholder in an insurance company, is approximately 5.4 lakh crore by 30 September, 2021. So, at valuation of Rs. 6 lakh crores, the issue is priced at an Embedded Value of ₹ 1.1, which is a discount compared to its listed Indian and global peers,” said Parth Nyati, Founder, Tradingo.