LIC IPO set to open on May 4, aims to raise Rs 21,000 crore

Life Insurance Corporation of India's (LIC) initial public offering (IPO) is all set to open on May 4 and close on May 9. The government will sell a 3.5 per cent stake in state-owned Life Insurance Corporation (LIC) to garner Rs 21,000 crore to the exchequer. It is  said that the issue is now valued at 1.1 times its embedded value of Rs 5.4 trillion. In September 2021, the government had appointed Milliman Advisors to value the country’s largest insurer and arrived at an embedded value of Rs 5.4 trillion. The Initial Public Offering (IPO) would open on May 2 for anchor investors, and on May 4 to May 9 for investors. Normal investors can apply in the Qualified Institutional Buyers (QIB) segment and the retail portion.It is said that the proposed issue will be in the price band of Rs 902-949, with a Rs 60 discount to policyholders and a Rs 45 discount for retail investors and employees.

The issue size was cut from the earlier proposed Rs 65,000 crore as market conditions turned negative after Russia attacked  Ukraine sending financial markets into a tizzy. In March this year, market experts had urged the government to price the public issue at attractive valuations for it to sail through in the current market conditions. LIC had filed its draft papers for IPO on February 13.The government had in February planned to sell 5 per cent stake or 31.6 crore shares in the insurance behemoth and had filed draft papers with Sebi. However, last week, the government decided to lower the issue size to 3.5 per cent. The LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current fiscal. The government has pegged disinvestment receipts at Rs 65,000 crore in the current financial year, up from Rs 13,531 crore mopped up last fiscal.