LIC IPO : Expected share price details

India’s biggest institutional investors and Life Insurance Company, Life Insurance Corporation of India (LIC) will have up to 31,62,49,885 (31.62 crore) equity shares of the face value of Rs.10 on offer through the offer for sale (OFS), representing 5 percent of equity stake. 

Shares of LIC are proposed to be listed on both the leading stock exchanges viz, Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). 

What is the Embedded value of LIC?

The DRHP disclosed the LIC’s embedded value at Rs.5,39,686 crore as of September 30, 2021. For life insurers, one of the most effective ways of calculation is through Embedded Value (EV) to arrive at their IPO value. It measures the value of the insurer by adding of the existing business (i.e. future profits) to the market value of net assets (i.e. accumulated past profits).

What is LIC’s Face value?

LIC has a fixed face value of Rs.10 each. It will later announce its price band and discount to eligible employees and policyholders after consulting the book-running lead managers (BRLMs).

Who are the Book-running lead managers (BRLMs) for LIC IPO?

The Book-running lead managers for LIC IPO are Kotak Mahindra Capital Company, Axis Capital, BofA Securities, Citigroup Global Markets, Nomura Financial Advisory, Goldman Sachs (India) Securities, ICICI Securities, JM Financial, JP Morgan India Private Limited and SBI Capital Markets and KFin Technologies Private Limited is the registrar to the offer.

What will be the Expected price band?

As per the rumours and a report by Business Today, the expected value per share will range from 2,560 to Rs.3,413 for the multiple of 3x and 4x, respectively. At the conservative multiple of 2x and 2.5x, the value per share comes to Rs.1,706 and Rs.2,133.