LIC IPO: Likely to open on March 10; read to know more

The initial public offering (IPO) of Life Insurance Corporation of India (LIC) is likely to be launched for subscription from March 10 to 14, 2022, if the regulatory approvals are obtained in time. The share sale could be worth around Rs 65,400 crore.

Going by the rumours, the price band for the issue is set at Rs 2,000-2,100 per equity share, with discounts to some retail investors.

The IPO is completely an offer for sale of 31,62,49,885 equity shares by the promoter, which holds a 100 per cent stake in the insurance behemoth. The President of India, acting through the Ministry of Finance, Government of India, is the promoter. The retail portion has been fixed at 35 per cent of the offer. The policyholder reservation portion will not exceed 10 per cent of the size and may also be offered at a discount.

To invest in the to be India's largest initial public offering the policyholders must have updated their PAN details on the LIC portal and should have a Demat account.

According to the DRHP filed by LIC with SEBI, a policyholder who does not update his/her PAN before February 28, 2022, will not be eligible to participate in its IPO under the portion reserved for policyholders.

The LIC DRPH says, "A policyholder of our Corporation shall ensure that his / her PAN details are updated in the policy records of our Corporation at the earliest. A policyholder who has not updated his / her PAN details with our Corporation before the expiry of two weeks from the date of the filing of this Draft Red Herring Prospectus with SEBI (i.e., by February 28, 2022) shall not be considered as an Eligible Policyholder."

As per the offer document, a portion of shares not exceeding 5 per cent of the offer will be reserved for employees. These are Indian citizens holding LIC policies as of the date of the draft red herring prospectus.

LIC, reportedly, is aiming to allot Rs 16,940 crore of shares to anchor investors on March 9, 2022.

The rumours related to the availability of India's largest IPO of LIC comes after LIC filed a draft red prospectus with SEBI on Sunday.

Possibly, after listing on the stock exchanges, LIC will topple Reliance Industries Limited to become India's most valuable listed company. LIC has a 66 per cent market share in New Business Premiums with 283 million policies and 1.35 million agents as of March 31, 2021. The embedded value of LIC is around Rs 5.40 lakh crore. LIC has the largest share in India's life insurance market at 64.1 per cent in terms of premium and 66.2 per cent share in terms of New Business Premiums.

The 65-year-old life insurer has a total equity base of 6.32 billion shares. As the public issue is fully an offer sale due to which the proceeds will go fully towards the government and will help in to come close to its disinvestment target. In the Union Budget 2022-23, presented on February 1, 2022, the government had pegged disinvestment receipts at Rs 78,000 crore for this financial year.