Summary
Making an official announcement on Wednesday, Tuhin Kant
Pandey, Secretary, Department of Investment and Public Asset Management
(DIPAM), said that the country's largest IPO will open on May 4. The price band
for LIC IPO has been fixed at Rs 902 to Rs 949 per share.
Expansion
There is a big news for the investors waiting for the
country's biggest IPO. An official announcement has been made by DIPAM to
launch it. Tuhin Kant Pandey, Secretary, Department of Investment and Public
Asset Management (DIPAM) gave information about this on Wednesday. He said that
the IPO of the country's largest company LIC will open on May 4 and will close
on May 9. Apart from this, it can be listed in the market on May 17.
DIPAM's Announcement
Tuhin Kant Pandey said that the price band for LIC IPO has
been fixed at Rs 902 to Rs 949 per share. We will call it LIC 3.0 phase, he
said. Significantly, LIC plans to raise around Rs 21,000 crore for this IPO.
Through this, the government is selling its 3.5 percent stake in LIC. Let us
inform here that earlier it was decided to keep its size 65 thousand crores,
which has now been changed.
Anchor Investors On May 2
Giving information about the IPO, Secretary DIPAM said that
the government will raise Rs 20,557 crore from LIC's IPO. This issue will be
open for subscription till 9th May 2022. The IPO will be a pure offering for
sale of 22.13 crore shares. Giving further information, he said that this mega
IPO will be opened for anchor investors on May 2.
Discount For Employee And Policy Holders
He said that the market has now recovered from the temporary
shocks caused by the geo-political situation that unfolded earlier. Pandey said
that a provision of exemption has been made for LIC policyholders including
retail investors and employees. Retail investors and eligible employees will
get a discount of Rs 45 per share in the IPO, while it has been decided to give
a discount of Rs 60 per share to the policyholders. The bid lot for the issue
has been fixed as 15.
Offer For Sale
Tuhin Kant Pandey said that the size of LIC IPO is
absolutely right in view of adverse capital market conditions. Due to this
there will be no shortage of capital and monetary supply will not be
interrupted. It is worth noting that LIC IPO will be purely offer on sale.
Through this, the company will issue 5.929 crore shares to anchor investors.
15.8 crore shares have been reserved for employees and 2.214 crore shares for
policyholders. Apart from this, 9.883 shares have been earmarked for QIBs.
Plan Of The Government
Let us inform that earlier the government's plan was to sell
five percent stake regarding LIC IPO. Under this, the company was about to
issue 31.6 crore shares. But due to the market turmoil caused by the
Russo-Ukraine War, it was reduced in size. Let us tell you that even though the
government has reduced the size of the IPO from Rs 65 thousand crore to Rs 21
thousand crore, it will still be the biggest IPO.
Government Stake In LIC
Significantly, the government has a 100 percent stake in the
country's largest insurance company Life Insurance Corporation of India (LIC).
That is, the government has 632.49 crore shares of the company. Let us inform
here that according to the plan made by the company earlier, 10 percent of the
issue size of the IPO was fixed for policyholders, while five percent for
employees.
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