LIC IPO in FOCUS: Sebi Notifies Easier Anchor Investor Rules                            

The Securities and Exchange Board of India(Sebi) has notified the relaxed norms for anchor investors, a move that will help smooth the way for the initial public offering of state owned Life Insurance Corp. of India (LIC). The lock in period for shares allotted to anchor investors will be 30 days until June 30 for public issues exceeding 10000 crores the regulator said.  Sebi had recently tightened norms for anchor investors, stipulating that for public issues of a size less than 1000 crore and opening on or after April 1, 50% of the shares allotted to anchor investors would be locked in for 90 days and the remaining would have a 30-day lock in period However, for public issues of a size more than 10000 crores, the new rule on anchor investors would have only been effective from July 1. Before April 1, shares allotted to anchor investors in an IPO were subject to a 30-day lock in Bankers and lawyers said the latest move is aimed at making more attractive for institutional investors to participate in the LIC shares sale Bids for anchor investors will open on May 2. The public offer will run from May 4 to May 9. The government aims to raised 21000 crores through the sale of 3.5 % stake. The issue has been priced at 902-949 per shares with a discount of 45 for retail investors and 60 for policyholders. LIC’s valuation has been pegged 6 lakh crore. “Anchor investors and high net worth individuals participating in Nil (non- institutional investor) category are major subscribers in IPO and their participation is also critical to inspire retail investors’ confidence in the public issue,” Sebi had said in an internal noted at its board meeting on march 29,” Anchor investors commit moneys upfront to the issuer and there by provide an indication of price and help to improve the price discovery of the issue during IPO.”

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