LIC IPO to list on BSE, NSE today; key things to know

After successfully completing the initial public offering (IPO) process, shares of Life Insurance Corporation (LIC) of India will finally make its debut on domestic exchanges today. The share of the insurance behemoth will be listed on the BSE and the NSE with a valuation of around ₹6 lakh crore. LIC would be the fifth-largest listed company in terms of market capitalisation after Reliance Industries, Tata Consultancy Services (TCS), HDFC Bank, and Infosys. The issue price for the IPO has been set at ₹949 per share, the upper band of the price range of ₹902 to ₹949 per share.

Prime Minister Narendra Modi-led central government had raised ₹20,557.23 crore by selling 3.5% shares in LIC of India in the country’s largest-ever IPO. Ahead of the IPO, the insurer had raised ₹5,627 crore from the anchor investors.

LIC listing came at a time when the share markets are being rattled by concerns about the Russia-Ukraine crisis, higher interest rate hike, and boiling inflation. The LIC shares are also facing the wrath of the investors with stock trading at a discount of ₹16-₹19 on Monday, paring its premium in the grey market, an unofficial market for unlisted securities. The grey market discount indicates that the share may have muted or soft opening at the domestic bourses. The grey market premium is not an accurate indicator of a stock price always and may vary as per market conditions.

Here are key things investors should know before listing of LIC shares:

• The shares of LIC of India will be listed on the BSE and the NSE today.

• The issue price of the LIC IPO has been pegged at ₹949, the upper limit of the price band.

• The IPO was oversubscribed 2.95 times amid tremendous response from investors. The policyholder portion of the IPO has been subscribed 6.11 times, while the portion reserved for employees was subscribed 4.39 times. Retail investors bid 1.99 times the allocated bucket, and non-institutional investors’ portion was subscribed 2.91 times. The issue raised ₹43,933 crore demand against the intended offer size of ₹21,000 crore.

• The allotment of shares was completed on May 12. The refunds to unsuccessful bidders began on May 13, while the shares were credited into the demat accounts of successful bidders on May 16.

• Investors who failed to secure LIC shares during IPO can still buy shares post listing in the secondary markets today.

• Analysts are of the view that investors should hold the LIC shares for mid- to long-term. Those planning to buy the shares on listing day need to account for market volatility.