LIC IPO expected to go public on May 2 with trimmed issue size: Report

Life Insurance Corporation of India’s (LIC) initial public offering (IPO) is undergoing various modifications and revisions in order to gain investor trust before it is launched in the coming days.

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The IPO is now expected to hit the market on May 2 and its size has been reduced from Rs 55,000-60,000 crore to Rs 21,000 crore, with a greenshoe option of Rs 9,000 crore, according to Business Standard.

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The overall IPO size is now Rs 30,000 crore, resulting in a 5% dilution of the government’s holding in the insurance giant.

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The current adjustment lowers the LIC’s valuation from Rs 10-11 lakh crore to Rs 6 lakh crore or 1.1 times the underlying value of Rs 5.4 lakh crore. The embedded value is a measure of the worth of an insurance company’s consolidated shareholders.

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Within this week, the government is expected to make a decision on the IPO date. It might happen as soon as next week, according to CNBC TV-18. The government has until May 12 to conduct the initial public offering (IPO) without having to file new papers.

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If the IPO is not launched now, it will have to be postponed until August or September due to the need to file new papers with revised quarterly results and values.

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The sale of 31.6 crore shares in the country’s largest insurer was scheduled for March but was postponed due to the Russia-Ukraine war. The public offering would reserve 35% of its offer for retail investors, 10% for policyholders, and 5% for LIC employees.

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The IPO would make a significant contribution to the current fiscal year’s divestment proceeds. Divestment receipts are expected to reach Rs 65,000 crore in 2022-23, up from Rs 13,531 crore the previous fiscal year.