LIC Press Conference Highlights: Life Insurance Corporation on April 27 invited the media for a conference at 12.30 pm on the forthcoming IPO. The much-awaited issue of the state-run insurance behemoth is set to open on May 2 for anchors and on May 4 for subscription, the sources said a day earlier, adding that the IPO will likely close on May 9. They said there will be no greenshoe option for the IPO priced at Rs 902-949, with a discount of Rs 60 for policyholders. Employees and retail investors will be given a Rs 45 discount. Besides policyholders and shareholders, the shares will be allocated this way: 50 percent for qualified institutional buyers (QIBs), 35 percent for retail buyers and 15 percent for non-institutional investors. With the revised price band, the government now expects to raise up to Rs 21,000 crore from selling a 3.5 percent stake in LIC, a third of the original expectations and a billion short of the original projection.
The Securities and Exchange Board of India on April 25 gave its nod to the updated draft red herring prospectus, which lists a 3.5 percent stake sale instead of five percent as mentioned in the previous draft papers. The revised DRHP was submitted before the market regulator last week. The red herring prospectus will be submitted by April 27.
TuhinKantaPandey, secretary of the department of investment and public asset management (DIPAM), on 27 April said the government expects significant retail participation for the public issue of country's largest insurer,Life Insurance Corporation of India (LIC).The government has taken extensive feedback from merchant bankers to determine valuation,Pandeysaidspeaking at a press conference in Mumbai on 27 April.According to theDIPAMsecretary,LICvaluation is “fair and attractive” and the decision to listLICwas after taking into account factors like market demand, reduced mkt volatility, domestic flows andLICperformance.The decision to list Life Insurance Corporation of India (LIC) was taken after considering market demand, reduced market volatility and company's performance,Pandeysaid. Further, there is no plan to bring any follow on public offer (FPO) in the next one year,Pandeyadded.Pandeysaid market regulator, Securities and exchange board of India,SEBIhas granted exemption for dilution of shares.
DIPAM secy TuhinKantaPandey said, "We aren't going to bring in any otherFPOforLICin the next one year." According to Sebi rules, companies can’t carry out a follow-on public offer (FPO) for six months after the IPO.
India's largest insurer LIC is likely to list on the stock exchanges on May 17, a week after its bumper initial public offering (IPO) closes.
The government is selling over 22.13 crore shares in LIC at a price band of Rs 902-949 a piece in the initial public offering, which opens on May 4 and closes on May 9.
As per the final papers filed with SEBI, the allotment of shares to the demat account of bidders will happen by May 16, post which LIC would commence trading of equity shares in the stock exchanges and list "on or about May 17".
While anchor investors will bid for the share sale on May 2, the issue would open for subscription of institutional and retail buyers on May 4 and close on May 9.
The government is selling 22,13,74,920 shares in Life Insurance Corporation (LIC), aiming to raise around Rs 21,000 crore. Up to 15,81,249 shares and 2,21,37,492 shares are reserved for employees and policyholders.
Over 9.88 crore shares are reserved for Qualified Institutional Buyers (QIBs) and over 2.96 crore shares for non-institutional buyers.
While retail investors and LIC employees will get a discount of Rs 45 per share, LIC policy holders bidding in IPO would get a discount of Rs 60 a share.
"Bids can be made for a minimum of 15 equity shares and in multiples of 15 equity shares thereafter," the LIC said in the Red Herring Prospectus approved by SEBI.
Life Insurance Corporation chairman hailed the state-run insurer that has been losing market share to private players as LIC 3.0on April 27 ahead of its initial public offering that opens for subscription on May 4."The time has come for LIC to be listed; I believe all LICians will work together to make it a huge success, and from now on we will call it LIC 3.0," said MR Kumar."LIC struggled in the first two decades to sell insurance in India. Then it gathered momentum in the 70s and 80s. That was LIC 1.0. Then it adapted to the competition, which was LIC 2.0. And now this is LIC 3.0," said Kumar. Read more here
BothLICand governmenthave decided to cede management control fromIDBIBank. Process for this has been set into motion.
The much-anticipated initial public offering (IPO) of Life Insurance Corporation of India willnot crowd out capital and monetary supply, saidTuhinKantaPandey, secretary at department of investment and public asset management (DIPAM), at a press conference on April 27.The IPO will open for subscription on May 4 andthe government will sell 3.5 percent stake in the range of Rs 902-949 per share.Pandeysaid even after the reduced size,LIC'swill be the largest IPO in India so far. He also expected strong retail participation in the issue.He added that the government wants to championLICas a long-term value creator in the equity market.Pandeysaid, "This is right-sized considering the capital market environment and will not crowd out capital and monetary supply, given the current environmental constraints.TheLIChas filed the red herring prospectus for its IPO with the price band set at Rs 902-949 per share.
Life Insurance Corp of India,on course itsRs 21,000-crore Initial Public Offer (IPO), aims at raisingup to Rs 5,630 crore on the upper price band through a pre-IPO placement of shares.The IPO will be a pure offer for sale of up to 221.37 million shares. The firm reserved around 59.29 million shares for the anchor investor portion. Employee reservation portion is at 1.58 million while policyholder reservation at 22.14 million. QIB portion set at 98.83 million.The anchor investment will open on May 2 and the IPO will open for subscription on May 4. It will close on 9 May. The basis of allotment will be on May 12 and shares will be credited on the demat accounts on May 16. The company plans to list on exchanges on May 17.India's largest IPO, which slashed around 60percent of its issue size due to poor market conditions, earlier announced its price band at Rs 902-949 a share.With this, LIC will become the country's fifth most-valued listed firm, with a market cap of over Rs 6 trillion, according to calculations byMoneycontrol. Globally, it will rank 186th in terms of market cap. Read more here
MR Kumar, LIC Chairperson said that the valuation is based on thethe circumstances and need of listing. Thefurther dilution by governmentin LIC is still to be discussed. It isunlikely that we will divest more in the near future.The share of surplus for participating will move from 5 percent To 10 percent. He added that how much more government will divest is not decided.Over a period of time, we should be able to reach a private industry margin of 20-25 percent.
LIC IPO to enhance value for investors in long term, says DIPAM secy
DIPAMsecyTuhinKantaPandey, said, "Even after the reduce size of₹21,000 crore, the LIC IPO will initially be the biggest ever IPO in the country," He further said, "This is right-sized considering the capital market environment and will not crowd out capital and monetary supply, given the current environmental constraints."
