Life Insurance Corporation of India (LIC) on Wednesday fixed price band at Rs 902-949 per share for its initial public offer (IPO) set to open on May 4. There will be a Rs 60 discount for LIC policyholders, while retail investors and eligible LIC employees will get a Rs 45 discount, according to sources.

The IPO, through which the government is diluting 3.5 per cent stake in the State-owned life insurer, will fetch Rs 21,000 crore to the exchequer. The IPO has valued LIC at Rs 6 lakh crore. 

The anchor investors’ quota for the IPO will open on May 2. The IPO will close on May 9. This will be the biggest-ever IPO in India despite “right-sizing”, considering the current environment. 

Earlier, the government had planned to sell 5 per cent of its stake in LIC, amounting to 31.6 crore shares and had filed draft papers to that effect with the Securities and Exchange Board of India (SEBI). However, last week, the government decided to reduce the issue size to 3.5 per cent, following concerns about the fluctuating market caused by the Russia-Ukraine war. 

It has filed papers, seeking exemption from the 5 per cent stake sale norm from the SEBI, sources said. According to SEBI norms, companies valued above Rs 1 lakh crore have to sell 5 per cent of their stake in an IPO. 

According to international actuarial firm, Milliman Advisors, LIC’s embedded value – a measure of the consolidated shareholders’ value of an insurance company – is at around Rs 5.4 lakh crore as of September 30, 2021. 

Analysts have put the market value of LIC at around Rs 6 lakh crore – 1.1 times its embedded value.