New Delhi: LIC’s initial public offering on Monday saw an “excellent” response from core investors, an official said. The government is selling 22,13,74,920 shares of Life Insurance Corporation (LIC) at a price range of Rs 902-949 per share. It aims to raise around Rs 21,000 crore. The issue would be open for subscription for institutional and retail buyers from May 4 to 9.
The issue opened for subscription by lead investors on Monday. The sale of LIC shares would be the highest amount ever raised through an initial public offering (IPO) in the Indian stock market. Previous such high fundraising was seen in the IPO of PayTM in 2021 at Rs 18,300 crore and Coal India in 2010 at Rs 15,200 crore.
Of the over 22.13 crore of LIC shares on offer, over 9.88 crore of shares are reserved for qualified institutional buyers and over 2.96 crore of shares for non-institutional buyers. Up to 15,81,249 shares and 2,21,37,492 shares are reserved for employees and policyholders.
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While retail investors and LIC employees will get a discount of Rs 45 per share, LIC policyholders bidding for the IPO will get a discount of Rs 60 per share. LIC would start trading on the exchange on May 17.
The intrinsic value of LIC, which is a measure of the consolidated shareholder value of an insurance company, was pegged at around Rs 5.4 lakh crore as of September 30, 2021 by international actuarial firm Milliman Advisors.
Based on investor feedback, the market value of the government-owned LIC has been set at 1.1 times its intrinsic value or Rs 6 lakh crore.