LIC IPO GMP, Subscription Status & Allotment

LIC IPO GMP, Subscription Status & Allotment

An initial public offering (IPO) refers to the process of offering company shares to general investors of a private company or state corporation. An IPO is when a company sells partial ownership to general or institutional investors in an IPO to raise money from public investors. The allocation of shares by the promoter in the context of a new issue or transfer of offered shares will be sold to shareholders in accordance with a sale offer to the successful bidder.

Let us conduct a detailed review of the company analysis, the company, the IPO publication date, the offer price for the IPO, the subscription, the allocation of the LIC IPO, the gray market price, and other details about the background of the company, the financial position of the company, the promoters of the company and other related matters. The company is the market leader in the life insurance industry with collected premiums and policies sold. With such a strong financial and market position, the foundations of the company are strong and the company appears to be positioned to achieve its financial objectives.

The Life Insurance Corporation of India opened its public issue on 4 May. The government plans to raise Rs 21,000 crores through an LIC IPO by liquidating 3.5 percent of its stake in the insurer. The price range for the LIC IPO has been set at Rs 902-949 per share.

LIC insurers are eligible for a discount of Rs 60 per share. There will also be a discount of Rs 45 for individuals and categories of employees. 

The invested value of LIC is Rs 5,39,686 and its implied market capitalization after issuance is Rs 6,00,242 crores, which is 11.2% more than its EEV. The Mcap/EV ratio for its registered counterparts is between 1.5x and 2.5x, so we think the LIC’s ratings, with its majestic size, are reasonable for the price.

As the data shows, its business is heavily based on an agent-based model (90%+), so further growth will require greater digital access to its network. However, with a market capitalization of Rs 6 lakh with a PAT of ~Kr 3,000, the PE ratio is 200(x). In our opinion, the PE ratio is not comparable to private players as the LIC distribution policy has now changed and more distribution to shareholders in the near future to increase and thus cool multiple profits. The company is losing its market share to private operators, which LIC may focus on in the future. With its majestic networks and expected double-digit growth, the industry has received an attractive valuation relative to its peers, making the LIC IPO a worthwhile investment. 

LIC IPO Details

Issue OpenMay 4, 2022
Issue CloseMay 9, 2022
IPO Price₹902 – ₹949
Face Value₹10
IPO Size₹21,008.48 Cr
Listing AtBSE, NSE
Offer for SaleApprox 221,374,920 Equity Shares
Retail Quota35%
QIB Quota50%
NII Quota15%
Discount ₹60 for Policy Holders
 ₹45 for Retail & Employees
IPO Lot Size15
Minimum Amount₹14,235 for 1 lot
Basis of Allotment12 May 2022
 Refunds13 May 2022
 Credit to Demat Account16 May 2022
 IPO Listing Date17 May 2022

LIC IPO Subscription Status (times)

DateQIBNIIRetailEMPPolicyholderTotal
May 4, 20220.330.270.601.171.990.67
May 5, 20220.400.470.932.223.111.03
May 6, 20220.560.761.233.064.011.38
May 7, 20220.671.081.463.544.671.66
May 8, 20220.671.191.523.674.841.73

LIC IPO GMP (Grey Market Premium)

DateGMPKostakSubject to
07 May₹60₹900₹2000
06 May₹50₹1000₹1500
05 May₹65₹1000₹1500
04 May₹65₹1500₹2000
03 May₹85₹1500₹2000
02 May₹85₹1500₹2000
30 April₹90₹1500₹2000
29 April₹75₹1000₹1500
28 April₹45₹800₹1100
27 April₹25₹500₹1000
26 April₹25₹400₹-
25 April₹15₹-₹-
23 April₹15₹-₹-

How to subscribe LIC IPO?

  1. Login to your Demat account
  2. Click on the IPO section from the menu
  3. Select the ‘LIC IPO’ tab. and select the category as ‘policyholders’.
  4. Fill in the required information, place a bid, and then click the submit button.
  5. Accept the mandate from the participating bank
  6. Select ‘apply now’ from the menu.
  7. To buy LIC IPO shares at discounted rates, complete the payment option using UPI or any other online payment mechanism.
  8. The amount will be locked-in till the allotment is announced.

LIC IPO FAQ

  1. When is the LIC IPO?

    IPO IPO issue will open from May 4, 2022.

  2. How many shares are being issued in the LIC IPO?

    Approx 221,374,920 Equity Shares are being issued in the LIC IPO.

  3. What is the price band for the issue?

    The price band for LIC IPO issue is ₹902 TO ₹949 per Equity Share.

  4. What advantages do policyholders have in the LIC IPO?

    A discount of Rs. 60 per share is being offered to eligible policyholders bidding in the Policyholder Reservation Portion. Thus, eligible policyholders can apply in the price range of Rs. 842 – Rs. 889.

  5. How can I know if I am an eligible policyholder?

    LIC has stated that all policyholders have until 28th February 2022 to update their PAN card details on their website.
    Check your Policy-PAN linking status on https://linkpan.licindia.in/UIDSeedingWebApp/getPolicyPANStatus

  6. What discount do retail bidders & employees get?

    A discount of Rs. 45 per share is being offered to Retail Individual Bidders and also to eligible Employees. Thus, Retail bidders and Eligible employees can apply in price range of Rs. 857 – Rs. 904

  7. What do I need to apply for the IPO?

    One must compulsorily have two things to apply for the LIC IPO – a Demat Account and a PAN card.

  8. What if I have multiple policies?

    If you have multiple policies, then all policy numbers can be added. However, you can apply for the IPO only once, even if you have multiple policies.

  9. Can non-policyholders participate in the IPO?

    Yes, the IPO is for everyone. However, you may not get the benefits that policyholders may get.

  10. Can a policyholder apply for IPO from someone else’s Demat Account?

    No, a policyholder using the Policyholder Reservation Portion to apply for the IPO needs to have their Demat Account to be eligible.

  11. How much percentage of shares of LIC IPO are reserved for Retail Quota?

    35% of shares of LIC IPO are reserved for Retail Quota.

  12. How much percentage of shares of LIC IPO are reserved for QIB Quota?

    50% of shares of LIC IPO are reserved for QIB Quota.

  13. How much percentage of shares of LIC IPO are reserved for NII Quota?

    15% of shares of LIC IPO are reserved for NII Quota.

  14. What is the lot size for LIC IPO?

    The lot size for LIC IPO is 15.

  15. What is the Minimum Amount for LIC IPO?

    The Minimum Amount for LIC IPO is ₹14,235 for 1 lot.

  16. When will be shares of IPO alloted?

    Allotment of shares of IPO will be done on12 May 2022.

  17. What id the LIC IPO Listing date?

    LIC IPO Listing Date is 17 May 2022

  18. What is the GMP of LIC IPO?

    The GMP of LIC IPO is ₹60 as on 07 May 2022.

In recent months the government took several important steps to prepare for the LIC IPO including implementing legislative changes to the LIC Act, extending the term of office of incumbent LIC IPO chairman MM Kumar, whose term expires on Wednesday, and a good pay increase for employees. The government has also made the LIC Amendment Act part of the Finance Bill, which will introduce the necessary legislative changes before the IPO. The LIC is supervised by the Insurance Regulatory and Development Authority and is subject to the 1956 LIC Act, which allows it to obtain special powers in several fields, including for companies with high shareholdings.

The Department of Investment and Public Asset Management (DIPAM) that oversees government shares and public sector companies has selected the insurance company Milliman Advisors to determine the LIC’s embedded value. The company’s listing will discipline the company and give it access to financial markets to unlock its value.

The capital markets regulator SEBI has relaxed minimum standards for public offerings to pave the way for an IPO of LIC. The government has proposed increasing the authorized capital of the LIC to 25,000 rupees on March 7, 2021, at 0.202 hrs, and disbursing the company’s capital at 100 rupees. Under the changes proposed in the Finance Act 2021, LIC’s authorized share capital will be divided into 2,500 crore shares at 10 rupees each.

The Cabinet Committee on Economic Affairs ( CCEA ) has in principle approved the proposed IPO to preserve the government plans for a mega-IPO for the Insurance & Life Insurance Corporation of India (LIC) in the current financial year. In the post-union budget (FY21-22) the government has taken several legislative and executive steps to set the way for a mega-IPO.

The union’s finance minister, Nirmala Sitharaman, said the government’s stake in the public sector insurance company, Life Insurance Corporation of India (LIC), will remain with the company when the IPO is sold. Secretary Tuhin Kanta Pandey from the Department of Investment and Public Asset Management (DIPAM) reported that the good news is that LIC and LIC policyholders will come together for the LIC IPO and this will initiate the mega IPO. By March 2022, those who have invested money in the IPO are expected to have a chance to make money instead of waiting for investors.

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