Highlights:
- Experts advise policyholders and employee category applicants to apply for maximum lots.
- Avinash Gorakshkar, Research Head at Profitmart Securities, opinionates that reserved category applicants are more likely to receive shares since the allocation is done on a proportionate basis.
- He further states that retail category applicants will land shares through a draw of lots and get lots through allotment or a minimum of 15 LIC shares if their application is selected through the lucky draw.
The Initial Public Offering (IPO) of the insurance colossus opened yesterday and will be open for subscription until May 9th, 2022. On the one hand, potential bidders are engrossed in scrutinising the financials of the LIC (Life Insurance Corporation) of India, and on the other, analysts have advised applicants from the policyholders and employees category to apply for the maximum possible lots that they can afford.
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Given that the allotment of shares in the retail category will be done through the draw of lots and that in the reserved category will be done through a proportionate basis, experts advised reserved category subscribers to give greater preference to their policyholder and employees category rather than the retail category. They added that the likelihood of getting shares through allotment is higher in reserved category applications than in the retail category.
Avinash Gorakshkar, Head of Research at Profitmart Securities, underlined why a LIC IPO applicant should lean towards the reserved category instead of retail. He mentioned that retail category applicants would get lots through allotment or a minimum of 15 LIC shares if their application is selected through the lucky draw. On the contrary, applicants in the reserved category are likely to be allocated some shares on a proportionate basis.
Avinash Gorashkar says that policyholder and employee category applicants will enhance their probability of getting more LIC shares by applying for as many lots as possible.
Anuj Gupta, Vice President — Research at IIFL Securities, seconded his view. He adds that applicants under the policyholder category should apply from this category as it would entitle them to get a discount of ₹60 on each LIC share. Conversely, applicants in the reserved category will either land one or 15 shares or nothing, considering the fact that allotment of shares for them will be done through a draw of lots.
