Coal India had also offered sops to employees under its IPO like LIC
As the initial public offer (IPO) of Life Insurance Corporation of India (LIC) opens tomorrow (May 4) for subscription, one of the most attractive aspects of it is the discount being given to its employees for subscribing to the issue.
The insurance behemoth will offer a discount of Rs 45 per equity share to its employees along with retail investors on subscribing the company’s shares.
This is apart from the discount of Rs 60 per share, which is being given to LIC policy holders.
As is known, the LIC IPO is touted as the biggest public offer having been unveiled in the country, as the insurer plans to raise Rs 21,000 crore through the exercise.
Prior to LIC, the Paytm IPO – which had opened in November 2021- was the largest public issue, as it was worth Rs 18,300 crore in size.
Let’s however go 11 and a half years back in time, when in October 2010, Coal India Limited (CIL) had come out with its IPO.
With an issue size of Rs 15,199 crore, the CIL’s was the biggest-ever public offer to have been unveiled by any company. It even eclipsed Reliance Power’s IPO – which had an issue size of Rs 11,563 crore – that had come out earlier in February 2008.
Coal India’s IPO had received an overwhelming response from all investors and was oversubscribed 15.17 times, leading to a total demand of Rs 2.3 lakh crore for the 63.16 crore shares on offer.
The reason why CIL’s IPO is being talked about here is that just like LIC, the coal behemoth too had offered discount to its employees.
Discount for Coal India employees in IPO
Government had reserved 10 per cent of the total shares on sale for CIL employees and had offered a discount of 5 per cent to workers on the issue price of Rs 245 per share.
However the country’s largest coal producer’s employees did not reap the benefit of the discount offered in the IPO, as CIL’s trade unions had boycotted the Government’s stake divestment in the company.
What had happened?
Coal India’s trade unions had asked employees not to participate in the issue.
The majority of the 3.98 lakh workforce did not bid for CIL’s shares when the Government offloaded a 10 per cent stake in it, generating a huge Rs 15,200 crore.
Union leaders had called a strike on the first day of the share offer in October 2010, and asked workers to abstain from bidding.
Out of the 63.16 crore shares on offer, 10 per cent of which were reserved for its employees, only 10 per cent of the reserved shares were bid for by employees due to the trade unions’ boycott of the IPO.
Interestingly though, lakhs of LIC employees too had taken part in a two-day strike against the public issue on March 28 and 29, 2022.
It would be interesting to see how LIC’s employees react tomorrow when the IPO opens for subscription.
For all the latest business News Click Here
