Highlights:
• The price band has been set at Rs 902-949 per share
• Policyholders would receive a Rs 60 discount,
• The administration decided to reduce the issue size to 3.5%
The price band for the Rs 21,000 crore public offer, which is expected to commence on May 4, has been set at Rs 902-949 per share, according to sources.
According to sources, the Life Insurance Corporation (LIC) will offer policyholders a Rs 60 discount and retail investors and employees a Rs 40 discount. Subscriptions for the issue are set to open on May 4 and finish on May 9.
The government had submitted draught paperwork with Sebi in February to sell a 5% interest in the insurance behemoth, or 31.6 crore shares.
However, due to continuous market volatility as a result of the Russia-Ukraine conflict, the government decided to reduce the issue size to 3.5 percent
What you should know about the LIC (IPO):
• The LIC IPO is expected to start on May 4th. The LIC has until May 12 to launch its shares if it is delayed for any reason. If it takes longer than that, the corporation will have to file new paperwork.
• Instead of the five percent mentioned in the previous Draft Red Herring Prospectus, the government, which owns the insurance giant, proposes to sell a 3.5 percent interest (DRHP),
• Due to market conditions, the size of the LIC IPO was reduced. The revised sale percentage was referenced in a new DRHP and approved at a meeting. Previously, the government planned to sell 31.6 crore shares.
• In September, the company’s embedded value – a measure of consolidated shareholders’ worth in an insurance firm – was projected to be Rs. 5.4 lakh crore. Milliman Advisors, an international actuarial firm, conducted the analysis.
• Three persons with firsthand knowledge of the development said the planned LIC IPO has received investment pledges worth Rs 13,000 crore from anchor investors, which is more than twice the amount of shares given to such investors.
• That figure has been adjusted as a result of investor comment; the market value is now 1.1 times the embedded value, or Rs. 6 lakh crore.
• With over 280 million policies, the 66-year-old Life Insurance Corporation of India dominates the country’s insurance business. According to Reuters, it was the fifth-largest worldwide insurer (in terms of insurance premium collection) in 2020, the most recent year for which data is available.
