The Life Insurance (LIC) corporation’s initial public offering (IPO), is expected to open on 4th May 2022, close on 9th May 2022. It is the first largest govt life insurance company IPO in Indian stock market history.
The size of LIC’S IPO has been reduced to Rs 21,000 crore (cut to 40%) the SEBI has agree to the updated draft red herring prospectus (DRHP), which state 3.5% stake sale instead of 5 % as mentioned earlier in the previous draft papers and there will be no green shoe option (of Rs 9,000) in the IPO, said an official.
·The Government, who wholly owns the insurance, plans to raise the amount of Rs 21,000 crore by selling shares of Rs 22 crore (or 3.5% stake), listing at BSE and NSE.
· The Public issue will be reserve 35% of its offer for retail investors, 10% of the shares will be reserved for LIC Insurance policy holders of India and 5% for its employees.
· LIC IPO Price expected btw 1,500 to 3,200 per share.
· Issue Size and Offer for Sale at 316,249,885 Equity Shares of Rs 10 each, market lot size is to be announced soon.
Reason to cut LIC IPO Size
Reason for cutting the size of LIC IPO is because Ukraine-Russia crisis, Foreign portfolio investors(FPI) withdrawal from Indian Market and higher inflation and resultant increase in the interest rates globally.
Who should invest in LIC IPO?
If you want to invest in LIC just for listing Gains then you should go for it, but if you are thinking of long term investment then you should avoid as we have seen that because of lock down most growing companies have shifted its sale from offline mode to online mode but according to the analysis we have seen that LIC does not pays much attention to its online segment which may result in reduction of its profit in long term.
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