LIC IPO Opens Today: Should You Subscribe?

The subscription period for the insurance giant Life Insurance Corporation of India’s Initial Public Offering (IPO) began today and will run until May 9, 2022. While investors are examining LIC’s financials, the grey market is also indicating that the public offering will be successful. According to market analysts, the GMP (grey market premium) for the LIC IPO today is 85, which is around 8% more than the LIC IPO pricing band of 902 to 949 per equity share.

LIC has been a reliable player with solid margins, and the company will have a significant opportunity to grow on all fronts with the shift in product portfolio approach and diversification of the distribution mix.

The protection market is the next major growth driver for life insurers, with LIC contributing less than its counterparts. With a greater focus on this market, we believe LIC is well-positioned to capitalize on the industry opportunity.

We feel LIC’s value is appropriate when compared to its rivals and the industry average.

The company’s valuation will be comparable to private counterparts in the future, given the development expectations for the pension/annuity segment and the company’s position as the market leader in the insurance business.

Important Information about LIC IPO

IPO date: The LIC IPO will be open for bidding to the general public from May 4 to May 9.

Price band: The LIC IPO price band has been fixed at ₹902 to ₹949 per equity share. However, policyholders and LIC employees applying for the public issue will get a ₹60 and ₹45 discount, respectively.

LIC IPO GMP: Market observers told LiveMint that the LIC IPO grey market premium (GMP) is currently at ₹85, ₹16 higher than the previous day.

IPO size: The Government of India has planned to raise ₹21,008.48 crores from the public issue, making it the country’s biggest IPO so far.

IPO Lot size and limit: Applicants will be able to apply in lots, where one IPO lot comprises 15 LIC shares. An applicant can apply for a minimum of one and a maximum of 14 lots or 210 shares. The minimum amount required to apply for the IPO, therefore, is ₹14,235 ( i.e. ₹949 x 15). The maximum bid amount for retail investors, policyholders, and LIC employees has been capped at ₹2 lakh.

IPO allotment date: The share allotment is likely to be announced on May 12.

LIC IPO listing: The LIC shares are likely to be listed on BSE and NSE on May 17.