The Life Insurance Corporation of India's much-anticipated initial public offering (IPO) is expected to begin accepting subscriptions on May 4th. The Securities and Exchange Board of India (SEBI) approved the Life Insurance Corporation of India's (LIC) initial public offering application last month. The company has submitted the Draft Red Herring Prospectus to the Securities and Exchange Commission. The subscription is expected to be open till May 9th.
The government, which controls the insurance behemoth in its entirety, intends to sell a 3.5 % stake. Due to the current market conditions, LIC has reduced the size of its IPO from 5% to 3.50%. At a board meeting on Saturday, a proposal to cut the size of LIC's IPO to 3.5 % from the intended 5% in its draught red herring prospectus (DRHP) was tabled and agreed upon.
Huge interest from anchor investors
India's potentially biggest IPO, LIC IPO is getting a lot of interest from anchor investors. According to the reports, so far anchor investors have committed to invest Rs 13,000 crore. This amount is almost twice the total value of the shares allotted to the investors.
It is pertinent to note that only shares worth Rs 6,300 crore were allotted to the investors. So far LIC IPO has received interest from 100 anchor investors. These include anchor investors, both domestic and foreign.
What is the expected Price Band?
As per a report in Hindustan Times, the price band for LIC's IPO will start at Rs 949 and there will also be a 30-day lock-in period for anchor investors. Global pension funds, private equity funds, sovereign funds and domestic mutual funds have already committed to invest in IPOs. This will result in greater distribution of LIC's shares and it will be easier for the board to adhere to the standards of corporate governance and maintain transparency.
