LIC IPO: Important meeting of LIC before launch today, know everything about the biggest IPO and their listing
Only a few days are left for the country's biggest IPO to be presented. LIC will present its initial public offering (IPO) on May 4, which will be open for subscription till May 9. Its listing in the stock market is expected by May 17. The company is going to hold an important meeting on Friday before the launch. Many issues will be discussed in this.
Plan to raise Rs 21000 crore
While officially announcing the launch date of the IPO and its Price Bank on Tuesday, Tuhin Kanta Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM), had said that the government will hold 100 per cent stake in Life Insurance Corporation of India (LIC) and this IPO. Going to sell 3.5 percent stake through Earlier, there was a preparation to sell five per cent stake. According to DRHP, the government plans to raise Rs 21,000 through this IPO. Let us inform here that in view of the situation arising out of the Russo-Ukraine war, the government has reduced the size of the issue in view of the market situation. However, even after this, it will be the biggest IPO ever in the history of the country.
So fixed share price
The insurance company has fixed its price band for the initial public offer (IPO) from Rs 902 to Rs 949 per equity share. According to DIPAM secretary Tuhinkant Pandey, the government has set a target of raising Rs 20,557.23 crore by selling 3.5 per cent of its equity stake or 22.13 crore shares of LIC. This is much lower than the earlier estimate of around Rs 60,000 crore. The IPO will be purely an offer for sale. Out of 22.13 crore shares offered for sale, about 5.93 crore shares have been reserved for anchor investors. On the other hand, there is 1.58 million shares for employees while the policyholder reservation is 22.14 million shares.
Rs 60 off for policyholders
According to DRHP, a provision has also been made for discount in share price for policyholders and employees in LIC's IPO. Policyholders will get a discount of Rs 60 per share, while retail and employees will get a discount of Rs 40. Half of the shares in this IPO are reserved for Qualified Institutional Buyers (QIBs), 15 percent will be reserved for non-institutional investors, while the rest will be reserved for retail investors. For this IPO, the government has also approved 20 percent FDI in the past.
Interest of 6.48 crore policyholders
On Thursday, Rahul Jain, director at DIPAM, had said that there is an overwhelming response to LIC's IPO. 6.48 Policyholders have shown great interest in buying the shares. For example, 6.48 crore policyholders have linked their PAN number with the policy details till the cut-off date (February 28, 2022). Please note that such policyholders who have updated their PAN card details in the policy details by February 28, can participate in LIC IPO through the reserved category. DIPAM Director said that any policyholder can invest up to Rs 2 lakh in the reserved category. One can also invest up to Rs 2 lakh in the retail category.
These five big IPOs came before this
Paytm: Fintech firm Paytm, which is providing online payment facility in the country, launched an IPO of Rs 18,300 crore in November 2021. Before LIC, the title of the biggest IPO was in the name of Paytm.
Coal India: Before Paytm, Coal India Limited launched its IPO in the year 2010. The size of this IPO was Rs 15,500 crore.
Reliance Power: Reliance Power also offered its initial public offering in the year 2008. The company had raised Rs 11,700 crore through this IPO.
General Insurance: IPO 2017 of General Insurance Corporation of India was launched. The state-run reinsurer had raised Rs 11,176 crore through initial share sale.
SBI Card: SBI Card is also one of the biggest IPO bringers. SBI Cards and Payment Services, owned by State Bank of India, raised Rs 10,355 crore in the year 2020.
Listing of these big IPOs is bad
The country's biggest IPO till date was launched with full enthusiasm, but its listing cooled that enthusiasm. Paytm's IPO was the worst listing in the last decade. Its shares were down 27 per cent on the day of listing and investors are yet to recover from the shock. Earlier, the worst listing was of Coffee Day Enterprises, a company running a restaurant named Cafe Coffee Day. In 2015, the company's stock had lost 17.60 per cent on the day of listing. Apart from this, the stock of Reliance Power was also listed in January 2008 with a loss of 17.20 percent.
Other companies upset with Paytm
Let us inform here that the poor listing of Paytm and the subsequent steep fall in its shares also affected other companies which were preparing to bring their IPO. In view of this, MobiKwik postponed its IPO for further and many other companies put their plans on hold. However, now the country's largest company Life Insurance Corporation of India is about to launch its IPO, then it will be interesting to see whether it proves to be a profitable deal for investors or flop like Paytm.