LIC Issue Price Fixed At Rs 949 Per Share; Policyholders, Retail Investors Get Discount

The government has fixed the issue price of LIC shares at Rs 949 apiece, the upper end of the IPO price band, fetching the exchequer around Rs 20,557 crore.

The country's largest insurer will list itself on the bourses on May 17, following the initial share sale offer which was oversubscribed nearly three times the issue size.

The Initial Public Offering (IPO) of Life Insurance Corporation (LIC) closed on May 9 and shares were allocated to bidders on May 12. The government sold over 22.13 crore shares or 3.5 per cent stake in LIC through the IPO at a price band of Rs 902-949 a share.

The retail investors and eligible employees of LIC were offered a discount of Rs 45 per equity share over the issue price, while policyholders got a discount of Rs 60 per share.

As per the prospectus filed by LIC on May 12, the offer price of the share sale has been fixed at Rs 949 per equity share.

LIC policyholders and retail investors have got the shares at a price of Rs 889 and Rs 904 apiece, respectively.

Shares were allocated to policyholders and retail investors after applying the discount applied to them.

The share sale fetched the government around Rs 20,557 crore.

The LIC IPO -- India's largest to date -- closed with nearly 3 times subscription, predominately lapped up by retail and institutional buyers, but foreign investor participation remained muted.

So far, the amount mobilized from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

LIC had last month reduced its IPO size to 3.5 per cent from 5 per cent decided earlier due to the prevailing choppy market conditions. Even after the reduced size of over Rs 20,557 crore, LIC IPO is the biggest initial public offering ever in the country.  

The share sale was initially planned to hit the markets in March. But the uncertainty in stock markets due to the Russia-Ukraine war pushed the issue to the current fiscal which began in April.

The proceeds from the LIC issue make up for about a third of the Rs 65,000 crore disinvestment target set for the current fiscal.

While it has already raised Rs 3,000 crore from a minority share sale in ONGC, Rs 211.14 crore is likely to come in after the handover of Pawan Hans management control to Star9 Mobility Pvt Ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC by June.

In the last fiscal the government mopped up Rs 13,531 crore from disinvestment of central public sector enterprises against the revised scaled-down target of Rs 78,000 crore.