LIC IPO, India’s biggest ever, opens on May 4; price band ₹902-949 per share

The Life Insurance Corporation of India’s (LIC) initial public offering (IPO) will open on May 4, it was announced on Wednesday (April 27).

The anchor investors will bid for the share sale on May 2 and the issue would open for subscription of institutional and retail buyers on May 4 and close on May 9.

LIC, which is India’s largest insurer, has set the price band at ₹902-949 per share for its ₹21,000 crore IPO.

With this IPO, which is through an offer-for-sale (OFS) route, the government is looking to divest its 3.5% stake in the state-run insurer by selling 22.13 crore shares.

The retail investors and eligible employees will get a discount of ₹45 per equity share and policyholders will get a discount of ₹60 per equity share. The bid lot for the issue would be 15.

Up to 15,81,249 shares and 2,21,37,492 shares are reserved for employees and policyholders. Over 9.88 crore shares are reserved for Qualified Institutional Buyers (QIBs) and over 2.96 crore shares for non-institutional buyers.

“Bids can be made for a minimum of 15 equity shares and in multiples of 15 equity shares thereafter,” the LIC said in the Red Herring Prospectus approved by Sebi.

The LIC IPO would be the biggest IPO in the history of Indian stock market. So far, the amount mobilised from IPO of Paytm in 2021 was the largest ever at ₹18,300 crore, followed by Coal India (2010) at nearly ₹15,500 crore and Reliance Power (2008) at ₹11,700 crore.

“This is right-sized considering the capital market environment and will not crowd out capital and monetary supply, given the current environmental constraints… It will be biggest in India despite reduced offer size,” Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said.

LIC is likely to list on the stock exchanges on May 17, a week after its bumper IPO closes.

As per the final papers filed with Sebi, the allotment of shares to the demat account of bidders will happen by May 16, post which LIC would commence trading of equity shares in the stock exchanges and list “on or about May 17”.

(With inputs from Agencies)