Great news for those who have LIC policy, the board can offer huge discounts in LIC IPO.
The majority of investors in the country, particularly LIC policyholders, are looking forward to the IPO. This wait may be coming to an end very soon. The timer has started counting down. The Securities and Exchange Board of India (SEBI) has filed an application for the LIC IPO.
The majority of investors in the country, particularly LIC policyholders, are looking forward to the IPO. This wait may be coming to an end very soon. The timer has started counting down. The Securities and Exchange Board of India (SEBI) has filed an application for the LIC IPO. On Sunday, a draught paper (DRHP) was filed. It will be the country’s largest initial public offering (IPO) in history. By March, it is expected to arrive. Exclusive information has been obtained from sources indicating that policyholders will receive a significant discount on the problem.
LIC IPO size could be around Rs 63000 crore
LIC’s initial public offering (IPO) might be worth roughly Rs 63000 crore. The total number of shares in the company will be 632 crore. The government is selling a 5% interest in the company. About 31.6 crore shares would be sold by the government. A 10% portion will be allocated for policyholders when the LIC IPO launches. The corporation, on the other hand, did not include it in the DRHP. RHP will make the decision. LIC policyholders must update their PAN in order to do so. The law has been changed to allow LIC policyholders to keep their staff and obtain a 10% share of the float at a 10% discount.
10% Discount on applications (up to Rs 2 lakh)
Discounts are being prepared for policyholders in the LIC IPO. According to sources, a member of the LIC board of directors favours providing the maximum discount. The LIC Act allows policyholders to be excused up to 10% of their premiums. On applications worth up to Rs 2 lakh, a 10% discount is possible. The discount, on the other hand, will be decided when the valuation has been decided. Discounts are expected to be indicated in RHP. In the current context, the IPO might include a reservation quota for policyholders of up to 10%.
How will LIC policyholders get benefit?
When the LIC IPO was announced, the government stated that 10% of the issue size would be allocated for policyholders. This is how employees get shares in a company’s initial public offering. It will, however, be on a competitive basis. As a result, policyholders will receive lower-cost shares than ordinary investors. LIC has around 289 million policyholders. A company can issue shares to employees at a maximum discount of 10% off the floor price, according to market rules.
LIC IPO Date (not been decided yet)
The date of the LIC IPO has yet to be decided. However, it is hoped that the issue will be available by March 2022. In the fourth quarter of FY22, it will also be listed. For IPOs and listings, the LIC Act 1956 was amended significantly.
LIC IPO Price Band
The price at which the shares in the LIC IPO will be sold has yet to be determined. However, the market’s path is critical. In fact, before they were listed on the market, government insurers’ initial public offerings (IPOs) had a poor track record. New India Insurance Company’s shares were offered at a price range of Rs. 770-800 in 2017. It was priced at Rs 748.90 on the BSE. New India Insurance’s stock is currently selling at roughly Rs 137, far below its initial public offering price. The NSE listed General Insurance Corporation of India at Rs 857.50. However, it now costs roughly Rs 135.
Why to Invest LIC IPO?
LIC is the country’s largest insurance firm. Given its size and reach among the general public, LIC’s business is projected to expand. Given the epidemic-like conditions, there are bright future potential. LIC has a 66 percent market share. LIC’s total assets were Rs 37.75 lakh crore as of March 31, 2020. It employs 2.9 lakh people and has a network of 22.78 lakh agents. LIC is also one of the largest institutional stock market investors. The stock market is a significant financial investment. A solid investment portfolio always comes with the expectation of a good return.