Know LIC IPO date, price, size, valuation, LIC policyholders discount

The much-awaited Initial Public Offering (IPO) of Life Insurance Corporation of India (LIC) has received in-principle approval from the Board. However, according to reports, the board has reportedly sought some clarifications on the draft paper. The board is expected to meet again over the weekend to take a final decision on the LIC IPO draft prospectus. Once the board approves the draft document, the Center will file it with the market regulator.

According to sources, the LIC IPO Draft Red Herring Prospectus (DRHP) is likely to be filed with the Securities and Exchange Board (SEBI) over the weekend or on February 15.

India is leaving no stone unturned to make the biggest listing ever. From changes in capital market regulations to checking all the necessary details to avoid further delays, preparations for the ‘Mother of All IPO’ are in full swing.

How big will LIC’s IPO be?

The embedded value of Life Insurance Corporation of India has been fixed at over Rs 5 lakh crore. The valuation of LIC’s IPO is likely to be three to five times the embedded value. At the current price, LIC could get a valuation of over Rs 15 lakh crore post listing, according to experts.

LIC IPO: How much stake will the government sell?

At present, the government has 100% stake in LIC. According to people familiar with the matter, the government is planning to sell around 5 per cent of the shares. LIC’s IPO will be purely offer for sale. The government plans to offer 316 million shares out of 6.32 billion shares and no new stock will be issued.

LIC IPO: What investors need to know

LIC policyholders are likely to get a chance to participate in India’s biggest IPO at discounted rates. The government is planning to give 5 percent discount to its policyholders in LIC IPO. Retail investors and employees are also likely to get some relaxation in the price band.

Angel One said, “The estimated price band for LIC IPO is likely to be in the range of Rs 400-600.

“We are anticipating the pace of opening of new retail broking accounts to get a boost in view of the interest arising out of the LIC IPO. At present there are about 25 crore LIC policyholders and eight crore demat accounts in India. With the government’s decision to reserve 10 per cent of the total issue for policyholders, we are expecting some relaxation in the issue price for policyholders,” said Arijit Malakar, Head of Retail Equity Research, Ashika Group.

A record 34 lakh demat accounts were opened in January ahead of the mega LIC IPO. “The brokers are offering discounts on the IPO price, which has prompted many policyholders to approach the brokers to open their demat accounts. LIC’s IPO is going to make a new entry for new retail investors in the stock market. Around 10 million applications are expected from retail investors for LIC IPO,” said ShareIndia Vice President and Head of Research.