Life Insurance Corporation of India (LIC) on Wednesday set its price range at Rs 902-949 per share for its initial public offering (IPO) which is set to open on May 4.
According to sources, there will be a Rs 60 rebate for LIC policyholders, while retail investors and eligible LIC employees will receive a Rs 45 rebate.
The IPO, through which the government will dilute a 3.5% stake in state-owned LIC, will raise 21,000 crore in the treasury. The IPO has valued LIC at ₹6 lakh crore.
The anchor investor quote for the IPO will open on May 2nd. The IPO ends on May 9th.
This will be the largest ever IPO in India, despite the “right sizing” given the current environment
Earlier, the government planned to sell 5% of its stake in LIC, equivalent to 31.6 billion shares, and submitted draft papers to the Securities and Exchange Board of India (SEBI). However, last week the government made the decision to reduce issuance volume to 3.5% due to concerns about market volatility caused by the Russia-Ukraine war.
It has filed papers to request an exemption from SEBI’s 5% share sale standard, sources say. Under SEBI norms, companies valued at over Rs. 1 lakh crore will be required to sell 5% of their stake in an IPO.
According to international actuarial firm Milliman Advisors, the embedded value of LIC, which is a measure of an insurance company’s consolidated shareholder value, is around 5.4 lakhcrore as of September 30, 2021.
According to investor feedback, the market value of LIC is around Rs. 6,000,000 crore – 1.1 times its embedded value.
With inputs from PTI
