LIC mega IPO opens for retail, institutional investors; to close on May 9

 LIC public offer, the country’s biggest-ever IPO, on Wednesday opened for subscription for retail and institutional investors.

LIC public offer, the country’s biggest-ever LIC IPO, on Wednesday opened for subscription for retail and institutional investors. The government aims to generate about Rs 21,000 crore by diluting its 3.5 per cent stake in the insurance behemoth. The LIC initial public offering (IPO), now open for retail and institutional investors, is set to close on May 9. LIC has fixed the price band at Rs 902-949 per equity share for the issue. The offer includes a reservation for eligible employees and policyholders. The retail investors and eligible employees will get a discount of Rs 45 per equity share, and policyholders will get a discount of Rs 60 per equity share.

The share sale is through an offer-for-sale (OFS) of up to 22.13 crore equity shares. The shares are likely to be listed on May 17. LIC has cornered a little over Rs 5,627 crore from anchor investors led primarily by domestic institutions. Anchor Investors (AIs) portion (5,92,96,853 equity shares) was subscribed at Rs 949 per equity share…LIC IPO Date

LIC IPO gets Sebi approval; may see delayed launch over Ukraine crisis

 LIC’s IPO is one of the fastest to get Sebi approval; the insurer had filed its DRHP on February 12.

India’s markets regulator has approved the public listing of Life Insurance Corporation of India (LIC), sources told ‘Business Standard’ on Wednesday as the war in Ukraine casts a shadow over the state-owned firm’s IPO timing. The government is looking to sell a 5 per cent stake, or 316 million shares, in the insurer through the IPO. Investment banking sources said Sebi issued the so-called final observations on Tuesday evening.

LIC’s IPO is one of the fastest to get Sebi approval; the insurer had filed its DRHP on February 12. Once a DRHP obtains final approval, the company can launch its share sale. However, LIC may not launch its IPO immediately given the volatile market conditions. Investment bankers said they would want to wait till the market sentiment improves.

Benchmark indices have come off 9 per cent this year amid a surge in global oil prices following Russia’s attack on Ukraine. The government is planning to divest 316.2 million shares, 5 per cent stake, in IPO. The government, which holds 100 per cent stake in LIC, was looking mop up between Rs 60,000 crore and Rs 75,000 crore in the IPO. This would peg LIC’s value between Rs 12 trillion and Rs 15 trillion.

Covid-19 pandemic may eat into bonuses of domestic investment bankers

Increments, on the other hand, are likely be shelved altogether considering the bleak outlook for fundraising in FY21

The coronovirus pandemic is likely to put a cloud on the bonuses to be received by domestic investment bankers this year. Based on the deal activity, experts reckon that the bonuses could have ranged between 30-60 per cent of annual salaries for 2019-20 (FY20). The actual payouts — to be doled out by the end of this month or the next — may be a lot lower as banks look to conserve cash in an uncertain environment. Increments, on the other hand, are likely be shelved altogether considering the bleak outlook for fundraising in FY21.

Bonuses for foreign bankers, however, have not been impacted by the current pandemic. That’s because these banks typically follow a calendar year cycle and were handed out their variable pay in January or February, much before the impact of the pandemic became clear. “The overall bonus pool for domestic banks may shrink this year as investment banks would want to conserve capital in the backdrop of the coronavirus pandemic,” said Pranav Haldea, managing director, PRIME Database. Last year, bankers took home 30-50 per cent of annual pay as bonuses, far lower than the 100-200 per cent they pocketed in the year before. The sky-high bonuses for FY18 correlated with the record fundraising by way of IPOs and QIPs that year.

Bonuses are typically commensurate with deal activity in any given year and the fees earned. The kind of deals the bankers were a part of and the role they played are also a deciding factor. Banks, on average, pocket 2-3 per cent as fees for managing IPOs and 1.5-2 per cent for handling QIPs. Buybacks fetch Rs 1-2 crore per deal. Fees vary depending on the issue size and the number of bankers managing a deal…Read More