Life Insurance Corporation of India’s (LIC) initial public offering (IPO) is all set to open on May 4 and close on May 9. The government will sell a 3.5 per cent stake in state-owned Life Insurance Corporation (LIC) to garner Rs 21,000 crores to the exchequer.
So far, Paytm IPO in 2021 was the largest ever IPO in India at Rs 18,300 crore, followed by Coal India in 2010 at nearly Rs 15,500 crore and Reliance Power in 2008 at Rs 11,700 crore.
LIC IPO DETAILS
The government has also filed papers with Sebi seeking exemption from the 5 per cent stake sale norm. According to the Securities and Exchange Board of India (Sebi) norms, companies with a valuation over Rs 1 lakh crore have to sell a 5 per cent stake in an IPO.
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.
The government had in February planned to sell 5 per cent stake or 31.6 crore shares in the insurance behemoth and had filed draft papers with Sebi. However, last week, the government decided to lower the issue size to 3.5 per cent.
The LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current fiscal. The government has pegged disinvestment receipts at Rs 65,000 crore in the current financial year, up from Rs 13,531 crore mopped up last fiscal.
Normal investors can apply in the Qualified Institutional Buyers (QIB) segment and the retail portion.
The portion of the Net Offer (including the Anchor Investor Portion) will not be more than 50 per cent of the Net Offer. Portion of the Net Offer can not be less than 35 per cent of the Net Offer.
Policyholders who have one or more LIC policies would be eligible to apply in the IPO under the Policyholder Reservation Portion.
However, the LIC policyholder must ensure that his or her Permanent Account Number (PAN) details are updated in the policy records of the Corporation at the earliest.
Eligible policyholders will be able to apply for the “Policyholder Reservation Portion” at the cut-off price.
The maximum bid amount under the policyholder reservation portion by an eligible policyholder must not exceed Rs 2,00,000.
The aggregate of reservations for eligible policyholders must not exceed 10 per cent of the offer size.
Eligible employees can apply for the “Employee Reservation Portion” at a discounted price.
The maximum bidding amount under the employee reservation portion for an eligible employee must not exceed Rs 2,00,000.
The reservation for eligible employees can not exceed 5 per cent of the total offer.
LIC IPO APPLY ONLINE
- Investors need to log-in to your online net-banking account.
- Subsequently, investors need to go to the investments section and click on the IPO/e-IPO option.
- Then investors will be required to fill in depository details and bank account details.
- Once these details are entered, the verification process will be completed.
- After the verification process, investors need to go to “Invest in IPO”.
- Investors need to select the IPO for which they would like to apply.
- Investors then need to enter the number of shares and the “bid price”.
- Investors must carefully read the “Terms and Conditions” document before placing any bid.
- Investors can then confirm and place their order by clicking on “Apply Now”.
LIC IPO SHARE ALLOTMENT CHECK
After taking part in the subscription process, applicants need to check whether shares have been allocated or not.
To check that applicants need to go to https://www.bseindia.com/investors/appli_check.aspx
Applicants need to select issue type.
Then enter issue name, application number, PAN details.
Finally, click on search.
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