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LIC IPO: Grey market is already indicating a premium of ₹45 for the public issue that is opening on May 4

LIC IPO: Grey market is already indicating a premium of ₹45 for the public issue that is opening on May 4
Stock Market2 min read
  • Life insurance behemoth will open its IPO on May 4 and will close on May 9.
  • The price band of the IPO is fixed at ₹902-₹949 per share.
  • Shares of the company are already demanding a premium of ₹45 per share in the grey market.
The most awaited initial public offering (IPO) of state-owned insurance behemoth Life Insurance Corporation of India (LIC) will open its initial public offering (IPO) on May 4 and will close on May 9.

The IPO is entirely an offer for sale by the government that is looking to raise ₹21,000 crore by selling 22.13 crore shares in the company.

LIC has the largest individual agent network of 8.96 lakh as of March 31, 2021 and individual agents bring 96% of new business premiums to the life insurer.

The life insurance giant is launching the largest IPO the market has ever witnessed. In fact, post launch, LIC will become the fifth largest company on the exchanges with an estimated market capitalisation of ₹6 lakh crore.

Meanwhile, shares of the company are already demanding a premium of ₹45 per share in the grey market.

The insurer offers special benefits to policyholders and retail investors willing to participate in the IPO.

A special discount of ₹45 is being offered to retail investors and employees of LIC. And a discount of ₹60 per share is being offered to about 30 crore policyholders associated with the life insurer. For application under policyholder quota, one should have a demat account and the PAN number should be linked with the policy.

Profitability of the life insurer has been gradually improving since the last three years.
Year

Profit after tax

FY21

₹2,974 crore

FY20

₹2,710 crore

FY19

₹2,627 crore

(Source: Red Herring Prospectus)

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