The initial public offer (IPO) of Life Insurance Corporation of India (LIC) will open for retail investors on May 4. The issue will close on May 9. The grey market premium (GMP) or the additional price over the upper end of price band of the issue currently trades at Rs 85, according to IPO Watch. It has been rising gradually as the IPO approaches.
On April 29, GMP of the IPO stood at Rs 70- Rs 80 per share. A day before, GMP was trading at Rs 60-70 per share.
The price band of the IPO is Rs 902- Rs 949. With GMP trading at Rs 85, the stock is likely to be listed in the market at (Rs 949 plus Rs 85) Rs 1034 per share. This amounts to a 9 per cent premium over the issue price. The insurance major plans to raise Rs 21,000 crore from investors.
The issue is already open for anchor investors today. LIC plans to raise up to Rs 5,630 crore at the upper end of the price band from the anchor investors.
The state-run insurer has reserved 59.29 million shares for anchor investors. Anchor investors are institutional investors who subscribe to an IPO before the issue opens to public. Usually, anchor investors invest in an issue a day before the opening of the IPO. They are required to bid for the shares within the price band for the IPO. Each anchor investor is required to invest a minimum of Rs 10 crore during the issue.
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The government will sell 3.5 per cent stake or 22,13,74,920 shares in the insurer through the IPO. Stake of the government, which currently stands at 100 per cent, will be trimmed to 96.50 per cent after the IPO.
The allotment of shares will be done on May 12, 2022. Lot size of the IPO is 15 shares bidding for which one will have to spend Rs 14,235. A retail individual investor can apply for up to 14 lots or 210 shares by spending Rs 1,99,290.
The stock is likely to be listed on BSE and NSE on May 17.
The firm has fixed Rs 2 lakh investment limit each for policyholders, employees, and retail investors’ quotas. Employees will get a discount of Rs 45 per share. Retail investors will also get a discount of Rs 45 per share during the IPO. LIC policyholders get Rs 60 per share discount on the final offer price. During the IPO, up to 15,81,249 shares and 2,21,37,492 shares will be reserved for employees and policyholders, respectively.
Over 9.88 crore shares will be reserved for qualified institutional buyers and over 2.96 crore shares for non-institutional buyers. The firm has fixed Rs 2 lakh investment limit each for policyholders, employees, and retail investors’ quotas.
KFin Technologies Limited is the registrar to the IPO.
