The first public offering of 31.6 million shares which is five percent of the stake held by the government is expected to hit D-street in March . Employees and policy holders of the insurance giant will be able to enjoy a discounted rate over the cost of the floor.
India’s largest public offering is slated to launch as Life Insurance Corporation of India (LIC) has filed an Draft Red Herring Prospectus (DRHP) with the capital regulatory body Securities and Exchange Board of India (Sebi) to facilitate the purchase of a five percent stake to the government. The employees and policy holders of the country’s most renowned insurance company would receive a cut over the cost of the floor.
Prior to applying for the LIC’s IPO the policyholders should be aware of some specifics.
LIC IPO DATE
The first public offering of more than 31.6 million shares, which is five percent of the stake of the government will likely to hit the D-street by March. Employees and policy owners of the insurance giant will receive a reduction over the cost of the floor.
LIC IPO SIZE, VALUE
While the draft documents don’t reveal the market value of LIC according to the norms of the industry, it would be three times embedded value, which is around 16 lakh crore.
“The DRHP of LIC IPO has been filed today with the SEBI. For filing valuation about 31.6 crore shares are on offer representing 5 per cent equity,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
Sources from the merchant banking industry said that the government expects to earn up to 63,000 crore (about USD 8 billion) from the IPO as per PTI. PTI report.
LIC IPO PRICE
This LIC IPO will be an offering for sale (OFS) from the Government of India and no any new shares are issued through the Life Insurance Corporation (LIC). The government holds a 100% stake, and over 632.49 millions shares with LIC.
The value of shares at the time of purchase is Rs. 10 per piece.
BIGGEST IPO IN HISTORY OF STOCK MARKET
This LIC IPO would be the largest IPO that has ever occurred in the Indian stock market. Once it is listed, its market value will be comparable to the highest companies such as RIL or TCS.
To date, the sum raised through Paytm’s IPO of Paytm in 2021 was the biggest ever, at nearly the sum of Rs 18,300 crore. This was following by Coal India in 2010 at more than Rs 15,500 crore. Then there was Reliance Power in 2008 at 11700 crore.
LIC IPO DISCOUNTS FOR POLICYHOLDERS
The government’s draft documents did not mention the discount that would be offered to policyholders or LIC employees who participate in an offering to the general public.
According to the rules that up to 5 percent of the size of an issue can be reserved exclusively for employees and up to 10 percent for policy holders.
LIC-PAN LINK, DEMAT ACCOUNT MUST
Insurance policy holders who intend to invest in the LIC’s IPO must make sure they have their permanent account Numbers (PAN) is in good standing to Life Insurance Corporation of India.
Other than that, policyholders need DEMAT accounts in order to be able to participate in the LIC IPO.
“In order to participate in any such public offering, policyholders will need to ensure that their PAN details are updated in the Corporation’s records,” LIC stated in its advertisement for 2021.
“Further subscribing to any public offering in India is only possible if you have a valid DEMAT account,” LIC stated in the advertisement.