It is also the first to enter the market with Rs 20,000-crore or more issue, which, at its listing on May 17, will command a market capital of Rs 6 lakh crore — possibly the highest for any stock listing.
Ahead of its initial public offering for retail investors, the LIC on Tuesday approached its policyholders through SMS and other media platforms to inform them about the share sale.
The IPO offers 22.13 crore shares for a 3.5% stake in the world’s 10th largest insurer by total assets. Of these, half the shares are reserved for qualified institutional buyers (QIB), 15% for non-institutional investors and 35% will be offered to retail investors. 15.81 lakh shares are reserved for employees while 2.21 crore shares are reserved for policy holders.
Who pays what
The IPO is priced between Rs 902-949 per share with investors allowed to bid in lot sizes of 15 shares and multiples thereof — which means, at the upper end of the price band, an investor needs to invest a minimum of Rs 14,235. Retail investors and employees get a discount of Rs 45 per share while policyholders are entitled to a discount of Rs 60 per share. The anchor investor portion, which opened on Monday, has already been fully subscribed, raising Rs 5,620 crore.
Retail investors to get an extra day to subscribe
Life Insurance Corp of India’s initial public offering will take subscriptions even on Saturday, an unusual move aimed at attracting investors including retail buyers for the nation’s biggest share sale.
The IPO, which kicked off on Wednesday, will remain open until May 9, including on Saturday, a notification on the National Stock Exchange of India Ltd said.
“This is a bit unusual for a share sale. However, this exception has been given to LIC IPO considering its sheer size and humongous interest from retail investors,” said Kranthi Bathini, chief market strategist at WealthMills Securities in Mumbai. “This can put some additional pressure on the system. However the Indian capital market infrastructure is geared to facilitate bidding on Saturday too.”
Game of thrones
While the LIC IPO (at $2.7 billion) certainly dwarfs in size the Paytm IPO, which, at Rs 18,300 crore, is now relegated to the second spot, it’s not the largest in this calendar year — which was LG Energy Solution’s $10.8 billion IPO. It’s also a far cry from Saudi Aramco’s $25.6 billion IPO, which remains the world’s largest till date. Also, watch out for Reliance Jio’s and Reliance Retail’s IPOs, which are expected to snatch away LIC’s crown as India’s largest IPO.
LIC: The insurance behemoth
LIC was formed by merging and nationalising 245 private life insurance companies on September 1, 1956, with an initial capital of Rs 5 crore.
Its product portfolio comprises 32 individual products (16 participating products and 16 non-participating products) and seven individual optional rider benefits. The insurer’s group product portfolio comprises 11 group products.
As on December 2021, LIC had a market share of 61.6 per cent in terms of gross written premium, 61.4 per cent in terms of new business premium, 71.8 per cent in terms of the number of individual policies issued, and 88.8 per cent in terms of the number of group policies issued.
(With inputs from agencies)
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