LIC IPO: Latest GMP as issue to open for subscription this week

Market


The much-awaited issue of the initial public offering (IPO) of Life Insurance Corporation (LIC) is set to open this week on Wednesday, May 4 and will remain open for bidders till May 9. The insurance company has set its price band for the initial share sale at 902 to 949 apiece. 

According to market observers, LIC shares are available at a premium (GMP) of 75 in the grey market today. The allotment of shares to the demat account of bidders will happen by May 16 and the shares of the company are expected to list on stock exchanges BSE and NSE on Tuesday, May 17, 2022.

The government, which wholly owns the insurance behemoth, plans to sell a 3.5% instead of 5% due to the market condition. The LIC IPO will be a pure offer for sale (OFS). 

DIPAM Secretary Tuhin Kanta Pandey had said the share sale of LIC has been trimmed to “right-size” it so as not to crowd out capital inflow to the market, and insisted that the issue is value accretive for all, especially for retail investors.

Out of the 22.13 crore shares offered for sale, around 5.93 crore shares have been reserved for the anchor investor portion. Employee reservation portion is at 1.58 million while policyholder reservation is at 22.14 million.

The size of the LIC IPO is set to be the largest so far in the country. The government targets to raise 20,557.23 crore by offloading 3.5 per cent of its equity stake or 22.13 crore shares of LIC. This is substantially lower than the earlier projection of about 60,000 crore.

LIC’s IPO has received bids from large investors for twice the size of the anchor book, sources told Reuters, with Singapore’s GIC Pte and Norway’s sovereign wealth fund being among the anchor investors.

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