LIC – No insurance for shareholders
The government is making an offer for sale (OFS) for 3.5% stake in the Life Insurance Corporation of India (LIC). At Rs 902, the lower point of the price band fixed for OFS, the LIC will be valued at Rs 5.7 trn. At this valuation it will be the fifth largest publicly listed Indian entity. The OFS will yield Rs199.7bn to the government, about 30.6% of the total disinvestment target of Rs650bn fixed for FY23. The government has apparently cut the offer size from 5% announced in February 2022 to 3.5%, considering the jittery market conditions. We shall therefore see multiple follow-on offers from the government in the coming years. 10% of the shares offered for sale are reserved for the policyholders of LIC; and 0.7% shares on offer are reserved for employees of LIC. 31.25% of the offer is reserved for household (retail) investors. Applicants from these categories will get a discount of Rs45 (Rs. 60 for policyholders) on the actual offer price. For all these categories the maximum appli...