LIC IPO: Insurance behemoth likely to go public on May 4

The initial public offering (IPO) of the Life Insurance
Corporation (LIC) of India is expected to open on May 4, reported CNBC TV18.

The issue is expected to close on May 9, and the anchor
book for the LIC IPO is likely to open on May 2, the report said.

The Securities and Exchange Board of India (SEBI) has
approved the updated draft red herring prospectus (DRHP), which lists a 3.5%
stake sale instead of 5% as mentioned in the previous draft papers.

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The revised DRHP was presented to the SEBI last week. The
government owns a 100% stake in the insurance giant and plans to raise an
amount of Rs 21,000 crore by selling around 22 crore shares or a 3.5% stake.

The LIC board will meet this week to
decide the price band for the IPO. The red herring prospectus will be submitted
before the market regulator by April 27, the report added.

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According to the LIC Act, the government can reserve up
to 10% for the policyholders. The government is targeting a valuation of Rs 6
trillion for the insurer by seeking Rs 21,00 crore for the revised holding on
the block.

The IPO is crucial to the government’s plan to reach its
disinvestment targets. The government has fixed disinvestment receipts at Rs
65,000 crore for 2022-23, up from Rs 13,531 crore in the previous financial
year.

Also Read | LIC third quarter net profit jumps to Rs 235 crore

The previous DRHP related to the IPO was filed with the
SEBI in February when the Centre had said that it plans to sell 31.6 crore
shares in a 5% stake sale in the state-owned insurance company.

However, the IPO plans were deferred due to volatile
market conditions following the Russian Invasion of Ukraine.

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The public issue size of the insurance giant at Rs 21,000
crore is larger than the amount raised from the Paytm IPO in 2021 at Rs 18,300
crore, followed by Coal India in 2010 at nearly Rs 15,500 crore and Reliance
Power (2008) at Rs 11,700 crore.