LIC launches largest IPO ever; issue opens on May 4

LIC launches largest IPO

A news story from New Delhi. Life Insurance Corporation (LIC) announced that it will launch its initial public offer (IPO) on May 4, Wednesday. The issue will come to an end on May 9, i.e., Monday.

The government will be trading shares in the price band of Rs 902- Rs 949. The government is planning to discharge 3.5 % stake or 22.13 crore shares in the company and will be raising Rs 20,557.23 crore.

Investors bid for shares in a lot size of 15 shares. There is an employee reservation of 15.81 lakh shares while 2.21 crore shares are restrained for policyholders. Retail and employees will acquire a Rs 45 discount, while policyholders will get a Rs 60 discount.

Half of the shares are reserved for qualified institutional buyers (QIB), 15 % of the shares will be reserved for non-institutional investors while the remaining is for retail investors.

In spite of its lower size, this is the largest IPO ever in India. It marks behind the maiden issue of Paytm that was released last year whose size was Rs 18,300 crore. The IPO values LIC at Rs 6.07 lakh crore.

Shares will be allotted to fortunate bidders on May 12, and the refund to unsuccessful bidders will be credited on the same day. Shares will be credited to the demat account by May 16 and the stock will start trading in the secondary market from May 17 onwards.

“LIC IPO is right sized, given the constraints in the market. LIC IPO will not crowd out capital and monetary supply in the market,” said Tuhin Kanta Pandey, Secretary, DIPAM.

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