New Delhi. LIC, which is preparing to bring the country’s largest IPO, is showing great kindness to small investors. The company has said in the draft paper submitted to the market regulator SEBI on Sunday that 35 percent of its total equity shares have been reserved for retail investors.
LIC has said in its draft paper that about 31.62 crore equity shares will be launched in the market through IPO. Out of this, 35 percent i.e. about 11 crore equity shares will be kept in reserve for retail investors. The company has made this strategy in view of the data in which retail investors have played a big role in investing money in IPO for the last one and a half years.
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Government will also earn from tax
Market experts say that about 1 crore demat accounts have been opened in a very short time. This shows how excited investors are about LIC’s IPO. If 10 percent of these investors also bid for the IPO and the shares are allotted, then the government will also earn a bumper through Security Transaction Tax (STT).
They will get more than half the stake
LIC has reserved 50% of the shares of the total offer size for Qualified Institutional Buyers (QIBs). Apart from this, 15 percent will be given to non-institutional investors. Not only this, 60 percent of QIB is also prepared to be given to anchor investors, which will form the basis of the company’s IPO. Of this, about 33 percent will be given to domestic mutual fund companies.
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Share for policyholders and employees as well
As per the prospectus submitted with SEBI, a maximum of 10% of the issue will be reserved for policyholders. In no case can this share exceed 10%. Even if your LIC policy has lapsed, you can still bid against the reserve quota. 5% share will be reserved for LIC employees. However, the discount will be disclosed only after the issue opens in the market.
Tags: IPO, LIC IPO
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