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Monday, September 26, 2022
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India’s SEBI reportedly approves LIC IPO

LIC-IPO

Earlier, there were reports that the government is expected to defer the IPO to the next financial year as the ongoing Russia-Ukraine war has dampened fund managers’ interest in the public issue

The Securities and Exchange Board of India has approved the initial public offer of Life Insurance Corporation of India (LIC), according to news reports. Thus the government plans to raise Rs 60,000 crore through the IPO has been cleared by SEBI.

Earlier, there were reports that the government is expected to defer the IPO to the next financial year as the ongoing Russia-Ukraine war has dampened fund managers’ interest in the public issue.

Bankers advising LIC had pushed the government to defer the launch of the stock offering, reported Reuters reported earlier, citing sources.

The government aims to offload a total of 316 million equity shares to investors through the public offering of the 6.32 billion outstanding shares, the document showed.

The current fiscal FY22’s divestment target was revised to Rs 78,000 crore from the Budget estimates of Rs 1.75 lakh crore and the government would like to cash in the LIC IPO to meet its revised divestment estimate.

The IPO drive will have a 50 percent reservation for Qualified Institutional Buyers (QIB), not 15 percent for Non-Institutional Investors (NII), and 35 percent reserved for retail investors.

Policy-holders along with employees of LIC will also have a quota reserved in the IPO, the document showed, according to the DRHP document.

The government owns a 100 percent stake in LIC. Once listed, it is likely to become the country’s biggest company by market capitalisation.

Actuarial firm Milliman Advisors LLP India has worked out the embedded value of LIC, which is upwards of Rs 5 lakh crore.

The listing of LIC is poised to be India’s biggest IPO till date.

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