LIC IPO, expected to be one of the biggest public issues in India, opened for subscription for retail and institutional investors. The government aims to generate about Rs 21,000 crore by diluting its 3.5 per cent stake in the insurance behemoth. The LIC share sale would be the biggest ever amount raised through an initial public offering in the Indian stock market. The previous such high fund raising was seen in IPO of PayTM in 2021 at Rs 18,300 crore and Coal India in 2010 at Rs 15,200 crore. The IPO is set to close on May 9.
It had seen 'excellent' response from anchor investors, according to reports.
Of the over 22.13 crore LIC shares on offer, over 9.88 crore shares are reserved for qualified institutional buyers and over 2.96 crore shares for non-institutional buyers. Up to 15,81,249 shares and 2,21,37,492 shares are reserved for employees and policyholders.
While retail investors and LIC employees will get a discount of Rs 45 per share, LIC policy holders bidding in IPO would get a discount of Rs 60 a share. LIC would start trading on the stock exchanges on May 17. LIC's embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors.
Based on investor feedback, the market value of government owned LIC has been pegged at 1.1 times its embedded value or Rs 6 lakh crore.