LIC IPO will be of behemoth size of nearly ₹21,000 crore. It will hit the primary market, on 4 May and will be available for subscription till 9 May. For anchor investors, the issue will be open on 2nd May.
LIC IPO comes with a great deal if you are policyholders or retail investors as the government has decided to offer a discount on the price band of the issue to these categories - making it cheaper for them compared to qualified institutional and non-institutional investors.
A price band of ₹902 to ₹949 per equity share has been fixed on LIC IPO for normal investors. However, LIC offers ₹60 per equity share discount to LIC policyholders, and ₹45 per equity share discount offered to retail investors.
"Even after the reduce size of ₹21,000 crore, the LIC IPO will initially be the biggest ever IPO in the country," DIPAM secretary Tuhin Kanta Pandey.
Pandey added, "We want LIC as the long-term value creator in the equity market. He also spoke about the valuation of LIC IPO and said, "this is the fair and attractive valuation."
Here's why experts believe that LIC IPO will open the floodgates for new investors.
B Gopkumar, MD & CEO, Axis Securities said, "There is a fair degree of interest in the LIC IPO from retail investors. We opened around 45,000 accounts for the IPO alone last month. Of these, 40% of customers are new to the market. While near-term market volatility is likely to weigh on the stock performance, we remain positive from the long-term perspective. Given the under penetration of insurance and improving financialization of savings, we expect LIC to maintain its market leadership position backed by robust business traction."
Additionally, Gopkumar added that "a strong rebound in terms of NBP/APE growth enabling market share gains in Q4FY22 hints at strong investor interest before the IPO. Thus, we believe investors should subscribe to the IPO for the long term, as we are confident that the structural story for the life insurance industry remains intact as uncertainties during the pandemic have highlighted the benefits of life insurance."
Further, Varun Sridhar, CEO - of Paytm Money said, "With the LIC IPO coming up, we believe that May will be a record month for Demat account openings in recent times. It is a milestone event for Indian Capital markets and is expected to bring millions of new investors. We at Paytm Money are excited for this opportunity as we have built one of the most robust and comprehensive trading and investment platforms in the country. More importantly, given the trust that LIC has built with the common man over the decades, a lot of these investors are expected to come from tier 2 & 3 towns. Our IPO product will allow these new retail and HNI investors to apply for the IPOs on the Paytm Money and Paytm app in a breeze."
