After months-long waiting, the insurance giant’s IPO is finally here! It is set to hit the market on May 4, 2022. The red herring prospectus (RHP) has clarified all the numbers.
Here is some insight into the recent updates.
The price band of the insurance behemoth has been fixed at Rs 902-949. The government will be offloading its 3.5% stake in LIC in the IPO. The price band that is issued is valued up to Rs 21,000 crore. For anchor investors, the issue will open on May 2. Shares will be allotted on May 12, and the stock will be listed on May 17. A lot of sizes of 15 shares and multiples will be available for the investors to bid on. The limit of the maximum bid cannot cross Rs 2 lakhs.
The firm has reserved 1.58 crore shares for employees, while 2.21 crore shares are reserved for policyholders. The government has reserved 10% for policyholders who will get a discount of Rs 60 while employees and retail investors will get a discount of Rs 45.
The policyholders who have one or more policies would be eligible to apply for the IPO. In the case of joint policyholders, one of the two can apply for equity shares. In both these cases, The applicant must have a Demat account and should also need to have updated PAN card details. Moreover, the policyholders who have lapsed policies can also apply for the IPO.
Should Investors Be Concerned About the Upcoming LIC IPO?
For years, the government has relied on LIC investors as a last resort to bail out companies. If this continues even after the market listing, it will negatively affect the financials and investors’ interest in the stock. It will continue to be a major concern to several analysts as they have spoken about this earlier.
The Way Forward
The LIC IPO will receive bountiful interest as its financial road ahead remains uncertain. As they have thousands of assets and investments, it won’t be easy to value the company and its business.
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