LIC mega IPO to open from 4-9 May: Price band, issue size, all details here 

The much-awaited initial public offering (IPO) of Life Insurance Corporation (LIC) will open on May 4 and close on May 9, 2022, sources confirmed to Business Today on Tuesday. The mega IPO will open on 2 May for anchor investors.

The announcements came after LIC Board's meeting was held earlier today to give an in principal approval to the above dates.

The price band for LIC public offer will be Rs 902 to Rs 949. Bid lot size will be 15 for each lot. Discount for retail and employees will be Rs 45 and discount for policy holders will be Rs 60.

The IPO issue size is Rs 21,000 crore, around 22.14 crore shares.

LIC IPO Reservations- 

Policy holders - 10 per cent of the issue size

Employees - 0.15 cr shares

After policy holders and share holders reservations , remaining shares to be allocated in the ratio of 50%Qib, 35% retail and 15% NIIs

60 per cent of QIBs share reserved for anchor investors.

The government aims to offload 3.5 per cent of its holding in the insurance behemoth, subject to regulator approval. The IPO values LIC at Rs 6 lakh crore.

The government had in February planned to sell 5 per cent stake or 31.6 crore shares in the insurance behemoth and had filed draft papers with market regulator SEBI.

However, the IPO plans faced headwinds from the ongoing market volatility due to the Russia-Ukraine war.

Last week, the government decided to lower the issue size to 3.5 per cent.

As the Securities and Exchange Board of India (SEBI) norms, companies with valuation over Rs 1 lakh crore have to sell 5 per cent stake in IPO.

LIC's embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors.

Based on investor feedback, the market value of government-owned LIC has been pegged at 1.1 times its embedded value or Rs 6 lakh crore.

LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current fiscal. The government has pegged disinvestment receipts at Rs 65,000 crore in the current financial year, up from Rs 13,531 crore mopped up last fiscal.

(With inputs from Karishma Asoodani)