after back to back IPO One of the most sought-after mega IPOs on Dalal Street LIC Grabbing everyone’s attention. Clearing the fog around the time on LIC IPO, Finance Secretary TV Somanathan, while addressing the Madras School of Economics, said that the sale of government stake in LIC will be done between March-June 2022. This means that the listing of LIC will be completed by June 2022. He said this in an address to the Madras School of Economics. This is the first time that clarity has been given on the timeline of LIC IPO. Earlier, Chief Economic Advisor KV Subramaniam had said that LIC’s IPO will be completed in the fourth quarter of 2021.
“…This year’s budget has ₹1.75 lakh crore as income from privatization. Air India business is doing well. You must have read that two dialects have arrived. There is also a listing of Bharat Petroleum and LIC, we believe it should be done by the fourth quarter of this year,” Subramanian said.
Taking a step forward, the government on Sunday selected Cyril Amarchand Mangaldas as legal advisor on LIC’s upcoming mega IPO. Four law firms – Crawford Bailey, Cyril Amarchand Mangaldas, Link Legal and Shardul Amarchand Mangaldas & Co – made presentations before the Department of Investment and Public Asset Management on September 24.
Apart from legal advisor, the government has appointed 10 top global and Indian merchant banks to manage the initial public offering of Life Insurance Corporation of India (LIC). It has also selected Concept Communications as the advertising agency and Kfintech as the registrar and share transfer agent for the IPO. The Department of Investment and Public Asset Management said it has appointed Goldman Sachs, JP Morgan, Citigroup, Nomura, Bank of America Securities, JM Financial, SBI Caps, Kotak Mahindra Capital, ICICI Securities and Axis Capital to manage the IPO .
Dipam secretary Tuhin Kanta Pandey tweeted a few days ago, “Government has finalized the Book Running Lead Manager and few other consultants for LIC IPO.
According to media reports, the government will reserve 10 percent of the issue size for the policyholder. You can also get a discount on the floor price. At present, LIC policyholders have purchased 289 million policies.
Finance Minister Nirmala Sitharaman first floated the idea of LIC’s IPO in the Union Budget 2020-2021. The government intends to sell its stake in the state-backed life insurance corporation to around 10 per cent. The government is seeking a valuation of Rs 8 lakh crore ($109 billion) to Rs 10 lakh crore for LIC. With this valuation, it can be termed as the largest IPO in the country. In the budget for 2021-2022, the government has set a disinvestment target of Rs 1.75 lakh crore and thus the government is actively pushing for disinvestment of LIC to achieve the target. According to experts, LIC disinvestment is the key to achieving the target.
In the midst of the IPO discussion, when all eyes are on it, its own trade union is against the IPO. According to one of its largest trade unions, LIC’s mega IPO could result in job losses and affect the company’s social infrastructure spending plans. Rajesh Kumar, general secretary of All India LIC Employees Federation, said in an interview that LIC was formed to provide insurance to rural and socially and economically backward people. Kumar said the company, which has been funding capital-intensive infrastructure projects such as roads, railways and power for more than six decades, may instead focus on “profit-maximizing investments” after the IPO.
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