The government revealed plans to launch an initial public offering (IPO) of Life Insurance Corporation of India (LIC) in its 2020 budget. The DRHP of LIC IPO was filed on 13th Feb. The government is offering 31.62 crore shares or 5% of the equity in the IPO, according to the filing with the Securities and Exchange Board of India. The Centre aims to come out with the IPO and subsequent listing of LIC on bourses by March 2022.
LIC IPO SEBI approval came on March 9.
The purpose of this IPO is to ensure more discipline, transparency in the company’s operations and give retail investors a chance to invest in the company.
A public offering does not signify LIC’s privatization as privatization and listing are different things. The government plans to sell a part of its stake through this IPO. Here are some important details about the IPO:
LIC has always been a government-controlled entity. An IPO occurs when a company decides to go public i.e. list on the stock exchange.
Here are a few things you should know about before investing in LIC IPO shares:
Below is a list of some of the banks that were shortlisted as book-running lead managers or BRLMs for the IPO:
Also Read, How to Apply for LIC IPO as a Policyholder
Companies | Type | Bidding Dates | |
SME | Closes 26 Nov | ||
SME | Closes 26 Nov | ||
Regular | Closes 26 Nov | ||
SME | Closes 27 Nov | ||
SME | Closes 28 Nov |
The government will hold a majority stake even after the IPO.
Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the IPO is 100% OFS (offer for sale — which means that the proceeds will go fully towards the government and help it reach its disinvestment target) by the Government of India, and that no fresh issue of shares will be made by LIC.
The Employee Reservation Portion will not exceed 5% of our post-offer Equity Share capital. The Policyholder Reservation Portion shall not exceed 10% of the offer size.
The policyholders may even be able to get a discount on the offer price.
LIC is keeping aside 35% of the offering, or nearly 11.1 crore shares, for retail investors.
A portion of the IPO will be reserved for anchor investors. The Corporation may allocate up to 60 percent of the QIB (qualified institutional buyers) portion to anchor investors on a discretionary basis. One-third of the anchor investor portion will be reserved for domestic mutual funds.
The draft red herring prospectus of the IPO has been released but we still don’t know about the LIC IPO date 2021 or any other details of the IPO. There is no final confirmation for the LIC IPO date 2022 by the government. It is expected to be launched in the first half of the financial year 2022.
Many government officials have been quoted saying the LIC IPO 2022 will happen by the end of March this year.