The IPO will entirely be an offer for sale (OFS) by the government of India, who will offload 22.13 crore equity shares of the company to raise Rs 20,557 crore.
LIC has fixed a price band of Rs 902-949 apiece with a minimum lot size of 15 equity shares. The company has announced a discount of Rs 60 per share for the policyholders, whereas retail bidders will get a discount of Rs 45 per share.
LIC has reserved 10 per cent equity shares for the policyholders’ quota whereas retail bidders have been allocated 35 per cent shares of the net issue.
Answering the query, market experts said that an investor can apply for both retail and policyholders category, for a limit of Rs 4 lakh (Rs 2 lakh in each category, net of the respective discount).
“With the LIC IPO, policyholders have an added advantage where they can apply for the IPO under two separate categories – retail and policyholders – to increase their chances of allotment,” said Varun Sridhar, CEO, Paytm Money.
In both categories, individuals can place maximum bids of Rs 2 lakh. This means that policyholders who apply under both categories can place a maximum bid of Rs 4 lakh, he added.
Interestingly, if an individual is an existing and eligible employee of LIC, they can bid for another Rs 2 lakh under the employee category. Employees are getting a discount of Rs 45 per share.
In a scenario where a retail investor is a LIC employee and a policyholder, the maximum bid allowed is Rs 6 lakh – Rs 2 lakh under all three categories, said Sridhar.
Vijay Singhania, Chairman, TradeSmart said the maximum limit of bidding under each category is Rs 2 lakh, net of discount. “Allotment, in case of an over-subscription, will depend on the process set by SEBI,” he added.
However, if an investor is willing to invest more than Rs 2 lakh, he can bid under non-institutional buyers (NII) category, but then he can not bid as a retail buyer. Bidding in both the quotas (retail and NII) will lead to rejection of both.
