LIC IPO may open the floodgates for new retail investors in stock market

The buzz around the disinvestment of Life Insurance Corporation (LIC), is getting louder with every passing day. All eyes are peeled for the timelines of the LIC initial public offering (IPO), which is expected in the fourth quarter of financial year 2021-22.

Reports suggest the government may dilute 5% stake in LIC and raise about Rs 75,000 crore, thereby giving the insurance behemoth a valuation of Rs 15 lakh crore.

Colossal demand is expected not only from institutional but retail investors as well. The retail demand for recent IPOs has been going through the roof. For instance, in this calendar year, the retail quota of the Rs 600-crore Latent View Analytics’ IPO was subscribed a whopping 120 times, while Paras Defence And Space Technologies’ retail quota was subscribed 113 times.

Unfortunately, the extent of retail oversubscription results in many investors from this category failing to get even a single allotment.