LIC IPO opens today: Price band, GMP, valuation, what to expect and other key details

India's largest insurance company Life Insurance Corporation (LIC) is set to make its debut in the stock market on May 4 in the biggest-ever Initial Public Offering (IPO) by an Indian company ever. Established on September 1, 1956, LIC was formed after merging and nationalising as many as 245 private life insurance companies. Cut to 2022, the insurance behemoth is opening for subscription on Wednesday with an IPO worth around Rs 21,000 crore.

LIC price band, GMP, and valuation

LIC has fixed the price band for its IPO at Rs 902-949 per share and the government intends to raise around Rs 21,000 crore by selling 22,13,74,920 shares which would be open for subscription for institutional and retail buyers from May 4-9. This amount will be raised as the government will be diluting its 3.5% stake in the company, making the total valuation the highest ever IPO.

The policyholders will get a discount of Rs 60 per share equity whereas a discount of Rs 45 per share has been fixed for retail investors and LIC employees. 

As for the LIC IPO GMP (grey market premium), it stood at Rs 85 on May 2 and is up by Rs 16 from its value a day before. Earlier today, LIC revealed that it has raised Rs 5,627 crore from anchor investors led primarily by domestic institutions. The shares by these anchor investors account for 5.9 crore shares which are subscribed at Rs 949 per equity share.

LIC raises Rs 5,627 crores from anchor investors

Earlier, LIC revealed that it has raised Rs 5,627 crores from anchor investors led primarily by domestic institutions. The shares by these anchor investors account for 5.9 crore shares which are valued at Rs 949 per equity share.

In an early morning filing to exchanges, LIC further revealed that out of the total, 4.2 crore shares (71.12%) were allocated to 15 domestic mutual funds through 99 schemes. The leading domestic institutions, according to the filing are ICICI Prudential Life Insurance, SBI Life Insurance, Kotak Mahindra Life Insurance, PNB Metlife Insurance, SBI Pension Fund and UTI Retirement Solutions Pension Fund Scheme.

It is worth noting that this would be the biggest fundraising for an IPO in India, after Paytm in 2021 at Rs 18,300 crore and Coal India in 2010 at Rs 15,200 crore.