According to sources, LIC’s IPO may open on May 4 and may close on May 9.
Life Insurance Corporation’s (LIC) long-awaited public issue offer is likely to open on May 4 and close on May 9, according to sources, who said the exact timeline would be confirmed after April 27.
Sources said the exact date range and other details of LIC’s initial public offering (IPO) will be confirmed next week.
According to sources on Saturday, the LIC board has approved a cut in its IPO issue size from 5 per cent to 3.5 per cent.
The government is now expected to sell its 3.5 per cent stake in LIC for Rs 21,000 crore, subject to the approval of capital markets regulator Securities and Exchange Board of India, SEBI.
This will value the insurance giant by Rs 6 lakh crore.
Significant cut in valuation for the 66-year-old company from the previous estimate of around Rs 17 trillion.
The draft and approved red herring prospectus filed with SEBI shows that the government had proposed sale of 5 per cent of its equity.
Still, despite that setback and the company’s plummeting valuation, it will be India’s most significant ever.
In fact, insurance’s public issue size of less than Rs 21,000 crore will be larger than the amount raised from Paytm’s IPO in 2021, the biggest ever at Rs 18,300 crore, followed by Coal India (2010) at around Rs 15,500. crore and Reliance Power (2008) Rs 11,700 crore.
The stake sale was initially planned to begin in March 2022, but the Russia-Ukraine crisis derailed those plans as the stock markets were highly volatile.
Earlier, the government was expecting over Rs 60,000 crore by selling around 31.6 crore or 5 per cent stake in the life insurance firm to meet its disinvestment target of Rs 78,000 crore in 2021-22.
But the sharp drop in ambitions for the IPO would be a setback for the government and challenge its fiscal balance as was the disinvestment situation and the aim was to replenish the state exchequer.