LIC IPO to open for anchor investors today: 5 points

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The initial public offering (IPO) of the state-owned Life Insurance Corporation of India (LICI) will open for anchor investors on Monday. For the general public, it will be open between May 4 and May 9. Expecting to raise around 21,000 crore, the government is planning to dilute 3.5 per cent stake.

The price band is fixed at 902- 949 per equity share. For the general public, it will be launched on Mar 4. The LIC IPO will be listed on the share market on May 17.

The proposed maiden public offer, which is set to be one of the biggest IPOs in the country, has received 13,000 crore worth of investment commitments from anchor investors, more than twice the value of shares offered to such investors, according to a report published by Mint.

As much as 50 per cent of the offer is reserved for qualified institutional placements (QIPs), including anchor investors. While 35 per cent is being reserved for retail investors and 15 per cent for high net worth individuals, ten per cent is reserved for policyholders.

Here are five points on the LIC IPO:

1) Post IPO, LIC will be run by a professional board with nine independent directors who have been already inducted. LIC managing director Siddhartha Mohanty said the post of chairman will be in place till 2024, and then replaced by MD and CEO, according to a PTI report.

2) With the largest market leadership in the life insurance market in India, the LIC has 40 lakh crore as assets under management (AUM) and reserves of 30 lakh crore, PTI reported.

3) Earlier the government had announced an IPO size of 5 per cent, but was trimmed to 3.5 per cent last month due to market conditions.

4) The company’s embedded value – or measure of consolidated shareholders value in an insurance firm – was estimated at 5.4 lakh crore in September. The evaluation was done by international actuarial firm Milliman Advisors.

5) The LIC IPO is expected to provide a major contribution to the government’s disinvestment proceeds in this fiscal, or FY22. The government had pegged disinvestment receipts at 65,000 crore – up from 13,531 crore raised in the last fiscal.

(With agency inputs)




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