LIC IPO: The central government is all set to file the draft document of the initial public offering (IPO) life insurance corporation According to various reports, with the market regulator LIC of India till this week. The embedded value of India’s biggest IPO has been finalized at over Rs 5 lakh crore. Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey had earlier said that the draft prospect would be filed after the insurance regulator gives the nod for India’s biggest ever IPO. Pandey said the size of the issue would be mentioned in the draft paper.
part of the much awaited LIC IPO Anchor will be reserved for investors. Around 10 percent of LIC’s IPO will be set aside for LIC policyholderPandey said.
lic ipo date
The government is likely to file a draft red herring prospectus (DRHP) of LIC IPO with the Securities and Exchange Board (SEBI) on Thursday or Friday, Pandey said in an interview with Financial Express. Pandey had earlier mentioned that approval for LIC IPO may come sooner after filing of draft papers as the preparatory work has been done in consultation with SEBI. LIC’s IPO is expected to hit the stock market by March.
LIC IPO Valuation
“I would say the embedded value could be over Rs 5 lakh crore and the enterprise value would be multiples thereof,” Pandey said in a recent interview with Reuters. The valuation of LIC IPO will be around three to five times the embedded value. Hence, the valuation of Mega LIC IPO can be around Rs 15 lakh crore. The LIC IPO will be crucial for meeting the central government’s disinvestment target. This will also help the government in reducing the fiscal deficit target of 6.9 per cent of GDP. FY22 by a notch.
LIC IPO Size:
The central government has reduced the disinvestment target for the current fiscal to Rs 78,000 crore. It was estimated at Rs 1.75 lakh crore during Budget 2021. So far, the government has earned over Rs 12,000 crore from disinvestment in the current fiscal. Therefore, the Center is dependent on LIC IPO to meet the disinvestment target.
At valuations above Rs 15 lakh crore, sale of 5-10 per cent stake can fetch up to Rs 1.5 lakh crore. According to sources, the government can sell up to 10 percent stake in LIC’s IPO. Pandey, however, declined to comment on whether the government is planning to sell stake in the first round.
LIC IPO for Anchor Investors, Policyholders and Foreign Investors
The central government is in the process of bringing in foreign investors to ensure the success of this mega IPO. According to sources, the government is considering a proposal for foreign investors to hold 20 per cent stake in LIC. For this, the government is in the process of amending the FDI rules so that investors can pick up stake under the automatic route without the government’s permission.
According to ET Now, LIC has approached anchor investors to raise around Rs 25,000 crore ahead of the IPO. Sources said that the government will reserve 5-10 per cent concessional rate for policyholders.
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