LIC IPO likely to open on 10-Mar with Rs.65,400 crore size

LIC has been India’s largest life insurer by a margin. Some of the numerical achievements are mind boggling. It still has about 74% share of new business premium and 70% share of new policies sold.

Its AUM is more than the combined AUM of all life insurers put together and even larger than the overall mutual fund AUM in India. Here is what has been reported about the details of the LIC IPO, although official confirmation is still awaited.

What has been reported about the LIC IPO

Here is a gist of what could likely be the details of the LIC IPO, the biggest in Indian IPO history.

1) The LIC IPO is expected to run from March 10th to March 14th with both the days being inclusive. In between there will be two weekend holidays too.

2) It is estimated that the total size of the overall issue would be in the region of Rs.65,400 crore, which will value LIC overall at over Rs.13 trillion, assuming a 5% stake sale.

3) While the final decision on valuation and price will be based on outcome of the roadshows, the reports are hinting at a price band of Rs.2,000 to Rs.2,100 for the IPO.

4) The government will issue a total of 31,62,49,885 shares (31.63 crore shares approximately) to raise Rs.66,500 crore at the upper end of the price band.

5) The markets are strongly expecting that the total reservation to the LIC policyholders will be to the tune of 3.16 crore shares or 10%. LIC has 28.3 crore policyholders.

6) The LIC IPO will strongly depend on the 28.3 crore policyholders and the network of 13.5 lakh individual agents as a massive captive market for the proposed IPO.

7) Apart from the policyholder quota of 10%, the government is also likely to offer a discount of up to 10% to the policyholders to apply in the LIC IPO.

8) In addition to offering the 10% discount to the policy holders, LIC is also expected to offer a special discount to its current employees, based on levels.

9) It is expected that the employees would get an allotment of 1.58 crore shares under the special quota and the 10% discounted price could be around Rs.1,890 per share.

10) While the price band has been pegged as per reports in the range of Rs.2,000 to Rs.2,100, the actual price band is expected to be announced only on 07th March.

11) One day ahead of the IPO opening, on 09th March, the LIC is expected to complete the anchor allotment to qualified institutional buyers (QIBs).

12) The market lot for investment will be in lots of 7 shares and in multiples thereof. The maximum investment that retail investors can make under the retail quota is up to 13 lots, which at the upper end of the band will entail an outlay of Rs.191,100 crore.
 

Here is the break-up of the shareholder allotment across segments