An official said anchor investors responded well to Life Insurance Corporation’s (LIC) first public offering (IPO) on Monday.
The government is selling 22,13,74,920 LIC shares at a price range of 902-949 a share, with a target of raising about 21,000 crore. The issue will be available for institutional and retail buyers to subscribe to from May 4 to 9.
An official said that the issue opened for anchor investor subscription on Monday and received a “great” response, adding that the details of price bids would be disclosed later that day.
The LIC share sale would be the largest ever initial public offering (IPO) in Indian stock market history. PayTM’s IPO in 2021, valued at 18,300 crore, and Coal India’s IPO in 2010, valued at 15,200 crore, were the last two high-profile fund raisers.
Over 9.88 crore LIC shares are reserved for qualified institutional buyers, while over 2.96 crore shares are designated for non-institutional buyers.
Employees and policyholders are entitled to up to 15,81,249 and 2,21,37,492 shares, respectively. While retail investors and LIC staff will receive a 45 percent discount, LIC policyholders bidding in the IPO will receive a 60 percent discount.
On May 17, LIC will begin trading on stock exchanges. International actuarial firm Milliman Advisors estimated its embedded value, which is a measure of an insurance company’s consolidated stockholders value, to be at 5.4 lakh crore as of September 30, 2021.
The market valuation of the government-owned LIC has been set at 1.1 times its embedded value, or Rs. 6 lakh crore, based on investor comments.
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