LIC IPO: Retail investors get extra day to bid for India's biggest issue

Life Insurance Corporation of India's (LIC) much-anticipated initial public offering (IPO) has opened for subscription today. The IPO, which will be open from May 4-9, will take subscriptions even on Saturday, shows a notification on the National Stock Exchange of India Ltd. This is believed to be an unusual move as bids are usually not taken on weekends when the stock market is closed. Analysts see this as a move to garner maximum investors in the country's biggest IPO to date.

A total of 22,13,74,920 equity shares, including an anchor portion of 5,92,96,853 equity shares, are on offer. The post-issue modification period will start at 10 AM on May 10 till 11 AM, while the cut-off time for UPI mandate confirmation is up to 12 PM till May 10. The IPO market timings have been fixed from 10 AM to 7 PM.

The price range for the issue is ₹902 to ₹949. The company is offering a discount worth ₹45 per equity share to retail and eligible employee categories and ₹60 per equity share to the policyholder category. Bids can be placed for 15 equity shares and in multiples thereof, with a maximum subscription amount for retail investors, employees and policyholders at ₹2 lakh for each category.

The qualified institutional investors can bid for 13,83,59,325 equity shares in a multiple of 15 equity shares, while NIB investors can bid for 9,88,28,085 equity shares in a multiple of 15 equity shares.

What’s the process to apply for LIC IPO?

One must compulsorily have two things to apply for the LIC IPO – a Demat account and a PAN card. A demat account is needed to credit the shares if you receive an allotment. A PAN card is essential for all IPOs so that the Income Tax Department can track the inflow and outflow of money for individuals.

What are ways to apply for IPO?

Eligible employees, policyholders and retail investors bidding in their respective portions can bid through the ASBA (applications supported by blocked amount) or the UPI mechanism.

Can you use the third-party account for placing bids?

Retail investors bidding in the net offer, eligible employees bidding in the employee reservation portion and eligible policyholders bidding in the policyholder reservation portion will ensure they use only their own ASBA account or only their own bank account linked UPI ID to make an application in the offer and not ASBA account or bank account linked UPI ID of any third party.

What to do if a beneficiary account is jointly held?

Ensure the names given in the bid-cum-application form are exactly the same as the names in which the beneficiary account is held with the depository participant. In the case of joint bids, the bid-cum-application form should contain the name of only the first bidder whose name should also appear as the first holder of the beneficiary account held in joint names.

Any lock-in period for retail investors?

There is no lock-in period and retail individual investors can sell the equity shares immediately on the listing of the equity shares if they choose to do so.

At what price should you bid?

Retail investors can bid at the cut-off price. However, in such a case, it is necessary to keep the bid amount blocked for investment at the cap price since it may turn out to be the offer price.