LIC IPO: The initial public offering (IPO) of the Life Insurance Corporation of India (LIC) has seen a strong response on Day 1, especially from policyholders and employees of the company. The LIC IPO, which will be open till May 9, saw a subscription rate of 67 per cent on Day 1 of its opening, as per NSE data. The policyholders’ quota was subscribed 1.99 times, while the Employee quota was subscribed 1.17 times. Through the LIC IPO, the government looks to garner a total of Rs 21,000 crore. The price band is fixed at Rs 902 to Rs 949 per equity share, with discounts for LIC policyholders, employees and retail investors.
Who can Bid for LIC IPO?
Anyone who has a demat account and a PAN can bid for the LIC IPO. The company has allotted as much as 35 per cent of the total shares for the retail category, under which policyholders get 10 per cent, general retail investors get 24.3 per cent and employees get 0.7 per cent of the shares.
While employees and retail investors get a discount of Rs 45 each, LIC policyholders are eligible to get a discount of Rs 60 per equity share. It must also be noted that to qualify for the LIC policyholder category, one has to link their PAN to LIC policy as of February 28 this year.
LIC IPO: What is the Maximum Amount Investors Can Bid For?
Investors can bid for a minimum of 15 shares and in multiples of 15 thereafter, to subscribe to the LIC IPO. This means that you can bid for 15, 30, 45, 60 shares and so on. However, the LIC has set a maximum amount of Rs 2 lakh for retail investors, policyholders and employees.
Therefore, a retail investor can invest up to 14 lots in the LIC IPO. Here is the calculation: Rs 904 (which is Rs 949 minus discount of Rs 45) multiplied by 15 (minimum number of shares) brings us to Rs 13,560 (for one lot). Thus, when we multiply Rs 13,560 by 14, it brings us to Rs 1,89,840. If you want to add another lot, the amount adds up to Rs 2,03,400, which is beyond the limit set by the LIC.
A policyholder, too, will be able to bid for only 14 lots. Here is the calculation: Rs 889 (which is Rs 949 minus discount of Rs 60) multiplied by 15 (minimum number of shares) adds up to Rs 13,335 (for one lot). Thus, when we multiply Rs 13,335 by 14, it brings us to Rs 1,86,690. After adding another lot, the amount becomes Rs 2,25,000 which is above the limit.
Can an Investor Use Multiple Trading Accounts?
No. An investor cannot apply for LIC IPO using multiple trading accounts if the maximum limit is already reached. It will be rendered invalid. However, a retail investor can bid for up to Rs 6 lakh in the LIC IPO if he or she qualifies as a policyholder, employee and a general retail buyer.
LIC IPO Reserved Quota
Around half of the LIC IPO issue will be reserved for the qualified institutional buyers (QIBs). Out of the QIB’s portion, 60 per cent has been earmarked for anchor investors on a discretionary basis. One-third of the anchor investor portion will be set aside for domestic mutual funds. About 15 per cent will be allocated to non-institutional investors (NII). Around 35 per cent will be available for retail investors to participate.
How to Buy LIC IPO Shares?
Apart from linking PAN with LIC policy, eligible investors also need to have a demat account to buy LIC IPO shares. One can use online banking apps or depository platforms like Groww, Zerodha and Upstox to apply for the issue.
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