Life Insurance Corporation of India (LIC) IPO 2022 – All You Need to Know

It’s finally here. Here is all that you want to know about the LIC IPO 2022:

  • LIC IPO shall be open from 4-9 May 2022
  • LIC shares will list on 17 May 2022
  • The IPO size is Rs 21,000 Crore. The LIC public issue would be the biggest IPO in the history of the Indian stock market. Though earlier, there were talks that the size of the IPO would be Rs 55-60,000 crore, volatile markets curbed the enthusiasm, the IPO size and the price per share. But still, it will be the biggest IPO of 2022.
  • Once listed, it is expected that LIC’s market valuation (which stands at about Rs 6 lakh crore based on the IPO price band) would be comparable to the biggest listed companies in India.
  • The government is selling only 3.5% of its ownership in the IPO. After listing, the government will continue to hold 96.5% in LIC.
  • LIC IPO share price band has been set at Rs 902-949 per share (for a face value of Rs 10 per share)
  • The discount for retail shareholders is Rs 45 per share. The effective price for retail will be Rs 904 per share (assuming prices are fixed at the higher end of the price band)
  • The discount for LIC policyholders is Rs 60 per share. The effective price for existing LIC policyholders will be Rs 889 per share (assuming prices are fixed at the higher end of the price band)
  • The minimum application size is 15 shares for retail investors. They can apply for a maximum of 14 lots of 15 shares each, i.e. up to 210 shares (i.e. is close to Rs 2 lakh per retail investor application)
  • IPO Reservation for retail is 35% and 10% for policyholders.
  • LIC policyholders who want to claim the 10% reserved quota for policyholders, should have a PAN-linked LIC policy at the time of applying for the IPO.
  • Will there be any listing gains for LIC IPO? I don’t know. No one knows. But if you look at the list of biggest IPOs in India, then things are not that rosy for listing gains. But LIC is a unique IPO with government backing. So you never know what might happen.
  • Also, currently, only a 3.5% stake sale is happening. We can be pretty sure that in near future (in a year’s time or more), further divestment via LIC FPO will also come to markets to further reduce the government’s stake.
  • If not immediately, then eventually it can be expected that LIC will get included in large-cap indices like Nifty50 & Sensex, etc. Though LIC’s low free float will come into question before that happens.

It will be interesting to see how LIC, or the symbol of trust and insurance in India, does in the markets. On listing, and more importantly, after that.

1 comment

Leave a Reply