LIC IPO Opens Today: India’s biggest Initial Public Offering (IPO) was also synonymous with huge investor response, LIC IPO got 11 per cent subscription within the first hour of its opening. LIC policyholders’ share was subscribed 22 per cent, while retail customers booked 16 per cent of their reserve share. On the other hand, employee share was booked at 23 per cent of the reserve size, while non-institutional investors booked 4 per cent of their share so far.
Life Insurance Corporation has fixed a price band of Rs 902 to Rs 949 per equity share for the public offering, which will close on May 9. Though trimmed, the LIC IPO will be the biggest public offering in the country so far. The government is selling 3.5 per cent or 22.13 crore shares and is targeting to raise Rs 20,550 crore through this public issue. The government had decided to reduce the size of the IPO keeping in view the volatility in the market. LIC policyholders will get a discount of Rs 60 per equity share. Retailers and employees will get a discount of Rs 45. Analysts say that given the attractive prices, LIC’s IPO may see strong demand. According to market observers, LIC is trading at a healthy premium or GMP.
The company has reserved 50 per cent of the net issue for Qualified Institutional Bidders (QIBs), where non-institutional bidders (NIIs) will get 15 per cent of the issue. The remaining 35 per cent has been allotted to retail bidders.
The largest primary offering of the Indian equity market is open for subscription till Monday. Investors can bid for a minimum of 15 equity shares and then in multiples thereof.
Most brokerage firms are bullish on India’s biggest ever initial public offering and have suggested subscribing to the issue. However, some of them have raised concerns over the fall in the market and future stake sale by the government.
Life Insurance Corporation of India is valued at Rs 6 lakh crore, which is about 1.12 times its embedded value (EV) of Rs 5.4 lakh crore, which the brokerage says is fair enough for its listed peers.
The insurer said in a filing to the exchanges that LIC has garnered over Rs 5,627 crore from anchor investors by allotting 5.92 crore shares at Rs 949 per share. Of these, 4.2 crore shares were allotted to 15 domestic mutual funds.
Some of the prominent names that participated in the anchor round include ICICI Prudential Life Insurance, SBI Life Insurance, Kotak Mahindra Life Insurance, PNB MetLife Insurance, SBI Pension Fund and UTI Retirement Solutions Pension Fund Scheme. Foreign partnerships include the Government of Singapore, the Monetary Authority of Singapore, Government Pension Fund Global and BNP Investments LLP.
The company’s shares will likely be listed on both NSE and BSE on May 17.
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