The much-awaited Life Insurance Corporation of India (LIC) IPO (preliminary public providing) is ready to open subsequent week with the general public sector behemoth submitting its Red Herring Prospectus (RHP) with capital market regulator SEBI on Tuesday night. However, a lot has modified since LIC filed its draft papers earlier in February. Now, the insurance coverage big is seeking to promote 221 million fairness shares, down from 316 million it had deliberate earlier. The situation dimension has been trimmed down to three.5% of fairness, from 5% deliberate earlier. But LIC’s public situation will nonetheless be the most important ever to hit Dalal Street. LIC IPO will open on May 4.
Price band and situation dimension
The authorities of India will promote shares of LIC at a set worth band of Rs 902-949 per fairness share of Rs 10 every face worth. At the upper finish of the value band, the LIC IPO will assist the federal government increase simply over Rs 21,000 crore. Earlier in February, the federal government had deliberate on elevating round Rs 60,000 crore from the general public situation, promoting simply over 5% stake. Now the dimensions of the sale has been introduced down to three.5%.
Valuations have additionally come down for LIC. Now the corporate is valued at simply over Rs 6 lakh crore. The RHP mentions the embedded worth of LIC to have been calculated at Rs 5.39 lakh crore as of September 31, 2022.
Bid lot and reservations
LIC IPO will open for traders to bid on May 4 and shut on May 9. Investors can bid for the problem within the worth band of Rs 902-949 per share and in a bid lot of 15 fairness shares and in multiples of 15 fairness shares thereafter. At the upper finish of the value band of, an investor must shell out Rs 14,235 for lots of LIC shares.
LIC IPO has a reservation of 15,81,249 fairness shares or 0.025% of the post-offer paid-up fairness share capital for subscription by eligible workers of the corporate. Further, 2,21,37,492 fairness shares have been reserved for subscription by eligible policyholders of LIC. This constitutes as much as 0.35% of the post-offer paid-up fairness share capital. LIC has additionally determined to present its workers a Rs 45 per share low cost and Rs 60 per share low cost to policyholders. Retail traders may even get a Rs 45 per share low cost.
Of the full IPO, 50% has been reserved for certified institutional consumers (QIBs), 35% has been put aside for retail traders, and 15% for non-institutional traders. As a lot as 60% of QIBs portion is reserved for anchor traders.
The situation will fully be a suggestion on the market (OFS) by the federal government of India and won’t embrace any contemporary situation of fairness shares. The proceeds of LIC share sale will go to the Government of India, and the insurance coverage firm is not going to obtain any funds. The Government of India at present owns 100% stake in LIC. LIC is a state-owned insurance coverage behemoth, controlling a big portion of the market share.
The public providing of LIC will assist the federal government attain its divestment goal for the present fiscal yr which has been set at simply Rs 65,000 crore. The goal for the earlier monetary yr, which the federal government failed to satisfy, was set at Rs 78,000 crore.
Source: www.financialexpress.com”