The price band for the much-awaited initial public offering of India’s largest insurance company, the Life Insurance Corporation of India, has been set at Rs 902-Rs 949 per share, according to an official.
The IPO is likely to open for bidding on May 4 and close on May 9, according to sources in the know of the matter. Moreover, the government is aiming to file Red Herring Prospectus (RHP) for LIC IPO this week. Through the public offering, the Centre is aiming to sell a 3.5 per cent stake in the insurance behemoth.
Rs 60/share discount for policyholders
LIC has reserved 10 per cent of the issue size for policyholders and 5 per cent for employees. The IPO will have Rs 60 per share discount for its policyholders. LIC has reserved up to 35 per cent of its total IPO size for retail investors.
IPO size
On April 23, 2022, the LIC board gave its nod to cut down the issue size to 3.5 per cent from 5 per cent. It means that the government will dilute only 3.5 per cent of its shares worth Rs 21,000 crore compared to 5 per cent shares announced earlier.
According to the revised DRHP, the government planned to raise an amount of Rs 21,000 crore by selling around 22 crore shares which is equivalent to a 3.5 per cent stake.
What happens if IPO misses the deadline
The government has time till May 12 to launch the initial public offering (IPO) of LIC without filing new papers with the market regulator Sebi. If the government misses the May 12 deadline, LIC would have to file fresh papers with Sebi giving the December quarter results and updating the embedded value.
