India's largest IPO, LIC, opens for subscription: 10 things to know

NEW DELHIUpdated: May 04, 2022, 10:41 AM IST
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India is preparing for its largest IPO or Initial Public Offering it's starting on May 4th. The company will be opening for subscriptions, the price band is set between 902 and 949 rupees per share, what does this IPO mean for the Indian economy?

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LIC IPO: The offer has opened for subscription today, and the last day to subscribe to the IPO is May 9 (Monday). Here are the things to know before subscribing.

The largest initial public offering (IPO) in India, Life Insurance Corporation (LIC), opened for subscription today.

The IPO's price range is Rs 902-949, with policyholders receiving a Rs 60 discount and retail investors and employees receiving a Rs 45 discount.

The government's 3.5 percent share in LIC will be sold in an initial public offering (IPO) on May 9 to raise Rs 205 billion.

Reserved LIC IPO Portions

The IPO is wholly a government offer-for-sale of 221,374,920 equity shares, with the government receiving the entire profits.

Up to 1,581,249 units are reserved for employees, and up to 22,137,492 units are reserved for policyholders, out of the total number of shares on the block.

Qualified institutional buyers will receive 50% of the net offer, retail investors will receive 35%, and non-institutional investors will receive 15%.

Here are ten things you should be aware of: 

1: The LIC IPO has a price range of Rs 902-949 per equity share.

2: LIC policyholders will receive a Rs 60 discount per equity share, while retail investors and employees will receive a Rs 45 reduction.

3: At the upper end of the offering price, investors can bid for a minimum of 15 shares (one lot) for Rs. 14,235.

4: On May 17, LIC shares will be offered on stock exchanges.

5: By dissolving a 3.5 percent share in LIC, the government hopes to generate Rs 210 billion.

6: The valuation for an IPO would be the greatest in the Indian market's history. Previously, the greatest fundraises were observed in the Paytm IPO last year, which raised Rs 183 billion, and Coal India, which raised Rs 152 billion in 2010.

7: The LIC has contacted policyholders via SMS and other means to inform them of the stock sale.

8: For several months, LIC has been alerting the public about the IPO through numerous platforms, including print and television commercials.

9: Due to the current market conditions, the country's largest insurer cut the size of its IPO from 5% to 3.5 percent.

10: On September 1, 1956, LIC was created by merging and nationalising 245 private life insurance companies, with an initial capital of Rs 50 million.