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Sameer Arora has a 'buy' tag on LIC IPO. What's his reasoning?

LIC IPO: The government expects to raise up to $2.74 billion from selling a 3.5 percent stake.

April 27, 2022 / 12:27 PM IST
File image of Samir Arora, Founder and Fund Manager at Helios Capital

File image of Samir Arora, Founder and Fund Manager at Helios Capital

The public issue of Life Insurance Corporation of India (LIC) has finally come at a price where it looks like the government wants to do a deal, said Samir Arora, Founder and Fund Manager, Helios Capital, in an interview with CNBC TV-18.

Samir Arora said the LIC IPO looks quite cheap at its current valuation. "The only issue is low float," he said. The LIC valuation is now at close to Rs 6 lakh crore, from Rs 17 lakh crore estimated earlier.

"We might apply for the LIC IPO. We have not tried for applying as an anchor investor due to the lock-in period and other complexities involved," Arora said.

LIC IPO Press Meet Live: India's biggest IPO kicks off, Meet The Chairman

The much-awaited IPO of the state-run insurance behemoth is set to open on May 4 and the issue is likely to close on May 9. The anchor book for the offer is expected to open on May 2.

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In a bid to encourage the policyholders to invest in the LIC IPO, the government has reserved 10 percent of the issue for the policyholders

The price band for LIC IPO has been set at Rs 902 to Rs 949, with a discount of Rs 60 for policyholders. For retail and employees, the discount will be Rs 45.

The government expects to raise up to $2.74 billion from selling a 3.5 percent stake.

Around 50 percent of the IPO issue will be reserved for qualified institutional buyers (QIBs). Out of the QIB’s portion, 60 percent has been earmarked for anchor investors on a discretionary basis. One-third of the anchor investor portion will be set aside for domestic mutual funds.

About 15 percent will be allocated to non-institutional investors (NII). Around 35 percent will be available for retail investors to participate.



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Moneycontrol News
first published: Apr 27, 2022 12:27 pm
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ISO 27001 - BSI Assurance Mark