2 May 2022 , 04:08 PM
According to the media reports, the government has asked public and private sector banks to raise per transaction limit for UPI payments to Rs2 lakh to ensure applications by retail investors for Life Insurance Corporation of India’s (LIC’s) initial public offering (IPO) through UPI are successfully processed.
The present limit for UPI is Rs2 lakh, but different banks have different per transaction limits. About Rs1 lakh can be spent in a day through UPI, but exception is made for IPO and insurance payments, among others. So, Retail investors can invest up to Rs2 lakh in an IPO.
Further, DIPAM created to check the technological readiness of back-end systems for IPOs, had found that processing of many applications failed if UPI was selected as a mode of payment by retail investors due to per transaction caps imposed by banks, the media statement added.
Life Insurance Corporation (LIC) estimates up to 70 lakh retail applications, which is more than five times the average retail applications received for the Indian primary equity market issuances in the last financial year, the ET report added. It said half of the retail subscriptions are expected to come from the country’s western region, including Maharashtra, Gujarat and Rajasthan.
Norway’s Norges Bank Investment Management, Singapore’s GIC Pte, and Abu Dhabi Investment Authority have also committed to becoming anchor investors in the LIC IPO, according to a Bloomberg report.
The price band for the LIC IPO has been fixed at Rs902-Rs 949 per equity share. It will have a Rs60 per equity share discount for policyholders, and a Rs45 discount for employees and retail investors. The share allotment is likely to be done on May 12 and its listing will take place on May 17.
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