“LIC IPO is right sized, given the constraints in the market. LIC IPO will not crowd out capital and monetary supply in the market,” said Tuhin Kanta Pandey, Secretary, DIPAM, which is the government agency that looks after investments and divestments.
Analysts across the spectrum had emphasized that given the huge size of the issue, there may be selling in the market as the capital that will move to the company will have to come from somewhere.
However, now the impact could be not much as the government has reduced the size of the IPO drastically. From earlier projection of Rs 60,000 crore, the actual size is now just Rs 20,557 crore. The government plans to offload 3.5 per cent stake or 22.13 crore shares in the company, which is lower than earlier announcement of 5 per cent.
Despite its reduced size, this is the largest IPO ever in India. It leaves behind the maiden issue of Paytm that came last year whose size was Rs 18,300 crore. The IPO values LIC at Rs 6.07 lakh crore.
The state-owned insurer said the government will be selling shares in the price band of Rs 902-949. Investors can bid for shares in a lot size of 15 shares, and multiples thereof.
