Government will go ahead with LIC IPO, says FM Nirmala Sitharaman

Speaking to reporters, the Finance Minister said, “Now that DRHP (for LIC IPO) is out, there is a buzz and a lot of interest in the market. I am happy that the way it is framed, Shareholders also have a role to play. The way it’s structured has generated a lot of interest and we will take that forward.”

When asked whether the IPO will come in this financial year, FM Sitharaman said, “DRHP is not issued two years ago. Is it?”.

DRHP refers to the draft red herring prospectus.

Earlier in February, the state-owned insurance company had filed a draft letter with capital markets regulator SEBI for sale of an estimated 5 per cent stake by the government. 63,000 crores.

LIC’s IPO is purely an offer for sale (OFS), through which the Government of India will sell its 5 per cent stake by selling 31.63 crore shares.

LIC employees, policy holders will get discount

Employees and policy holders of the insurance giant will get a discount on the floor price.

On Monday, LIC Chairman MR Kumar said the insurance giant is watching the geopolitical situation carefully though it wants to list the IPO in March.

When asked about the impact of the evolving geopolitical situation on the upcoming IPO, Kumar said, “We are watching the situation closely and carefully, but we are very much looking forward to listing in March.”

As per the DRHP filed last week, the maximum bid amount under the policyholder reservation portion by an eligible policyholder will not exceed 2,00,000 (net of policyholder exemption).

The share capital of LIC was raised from 100 crore 6,325 crore during September last year to facilitate the IPO.

Meanwhile, the RBI is also planning to sell dollars to banks and extract liquidity of the rupee through foreign currency swaps, a move that will help the monetary authority manage liquidity in the banking system ahead of the country’s biggest share sale. Will do

The central bank will enter into a $5 billion sell-buy swap with banks on March 8 to enhance the maturity profile of its forward dollar book, it said in a statement after the markets closed on Monday.

The move comes ahead of LIC’s initial share sale to be held in March, which is expected to bring in major foreign inflows.

LIC had also issued a clarification stating that subscribers of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are not eligible to avail benefits offered to policyholders in the proposed IPO.

“This is a group insurance product and (PMJJBY policyholders) are not eligible,” LIC said in a statement.

This clarification comes a day after Kumar said that PMJJBY customers are also eligible for benefits available to policyholders. However, LIC said in the statement that it was “inadvertently mentioned”.

Last month, LIC reported profit after tax of 1,437 crore for the first half of the financial year 2021-22 as compared to 6.14 crore in the year-ago period.