Page 11 - Insurance Times May 2022

LIC of India

News

SEBI may postpone implementation of tougher norms sale after seeing the total demand till
May 2 from anchor investors,” the sec-
for LIC IPO ond source added.
Sebi has proposed to postpone the implementation of tighter anchor investor The insurer’s board, which met recently
norms for large IPOs. Bankers said the move is aimed at facilitating better in Mumbai, also approved a discount of
institutional participation in the upcoming initial share sale of Life Insurance Rs 60/share for policyholders for whom
Corporation (LIC). 22.1 million shares, or 10% of the total
Until now, shares allotted to anchor investors in an IPO were subject to 30 days offer size, has been reserved. The dis-
lock-in. However, with effect from April 1, 50% of such shares allotted to the count is Rs 45/share for retail investors
anchor investors would be subject to an enhanced 90 day lock-in period. and employees, and for the latter, 1.5
million shares or 0.68% of the total is-
However, now the regulator has proposed to exempt all IPOs worth more than
Rs 10,000 crore from the enhanced norms until July 1,2022, according to agenda sue issue size will be reserved.
of the Sebi board meeting dated March 29. The net of the two categories — policy-
holders and employees, 35% — is set
"The impact of the new allocation methodology for NIIs (non-institutional inves-
tors) and lock-in provisions for Anchor Investors appears to be uncertain and may aside for retail investors, while 50% is
adversely affect their participation in the forthcoming IPOs especially those of kept for qualified institutional buyers
the large issuers," said the document. "Accordingly, it is felt that implementa- (QIBs) and 15% for non-institutional in-
vestors. As much as 60% of QIBs por-
tion of these amended provisions especially for large issuers from April 01, 2022
tion is reserved for anchor investors.
may not be in the best interest of securities market at this stage."
According to the sources, the minimum
LIC IPO set to open May 04, The IPO will still be the country’s larg- bid size for the IPO will be 15 shares.
est though the issue size is lower than
price band likely at Rs 902- the 5% mentioned by the insurer in the The reduced size of the IPO from 5% in

949/share draft IPO papers filed with the regula- the draft offer document, and the
lower valuation are prompted by feed-
Life Insurance Corporation (LIC) has tor on February 13. The valuation is also back from institutional investors, and
fixed the price band for its initial public almost half the level indicated by the recent capital outflows from the Indian
offer (IPO) at Rs 902-949 a share. The Centre in the FY22 Budget. and other emerging-economy markets
issue, which will remain open for retail For the anchor investors, the issue will following the Russia-Ukraine war.
investors from May 4 to 9, will enable open on May 2. Another source said
the government to offload 3.5% stake thanks to ‘strong demand’ in the form Life insurance companies
in the insurer for Rs 21,000 crore, ac- of informal bids from domestic institu- new business premium
cording to an official source. The insurer tional investors, including mutual funds,
filed the red herring prospectus (RHP) the anchor book looked subscribed by rise 37% in March
with the Securities and Exchange Board 1.6 times as of May 2. “We, however, Life insurance companies have
of India (Sebi). saw no point in going for a 5% stake recordedanincrease of 37 percent in

The Insurance Times, May 2022 11