LIC IPO: Insurance behemoth likely to go public on May 4
- LIC public issue is expected to open on May 4
- SEBI has approved the updated DRHP, which lists a 3.5% stake sale
- Centre plans to raise an amount of Rs 21,000 crore by selling a 3.5% stake
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.
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.
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.
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.