LIC will launch the biggest initial public offer (IPO) in the history of Indian stock markets on Wednesday, May 4, 2022.
Through this IPO, the government of India will be liquidating its 3.5 percent stake in the corporation
And aims to mop up about Rs 21,000 crore at the upper end of the price band of Rs 902 – 949 per share.
This will result in an implied market capitalisation of Rs 6 lakh crore for the company.
The government will be selling the stake entirely through an offer for sale under which 10% of the shares are reserved for LIC policyholders and 0.7% for LIC employees.
Brokerages and market experts unanimously recommend investors to subscribe to the issue as the current valuations are attractive
considering its strong market presence, improvement in profitability due to changes in surplus distribution norms and strong sector growth outlook.
They justify the discount to private players because of the headwinds like declining market share, lower short-term persistency ratios and sub-par margins.