Sources said that the initial public offering (IPO) of the country’s largest insurance company LIC will open on May 4 and will close on May 9.
The IPO, through which the government will sell a 3.5% stake in state-owned Life Insurance Corporation (LIC), will fetch ₹21,000 crore to the exchequer.
LIC is valued at ₹6 lakh crore in the IPO.
The government had in February planned to sell 5% stake, or 31.6 crore shares, in the insurance sector and filed a draft paper with SEBI.
However, the IPO plans faced a backlash from the ongoing volatility in the market due to the Russo-Ukraine war.
Last week, the government decided to reduce the issue size to 3.5%.
Sources said the government has also filed papers with Sebi seeking exemption from the five per cent stake sale norm.
As per the Securities and Exchange Board of India (SEBI) norms, companies with valuations above Rs 1 lakh crore are to sell 5% stake in the IPO.
The embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, was pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman Advisors as of September 30, 2021.
Based on investor feedback, the market value of state-owned LIC has been pegged at 1.1 times its embedded value or ₹6 lakh crore.
LIC’s IPO will make a major contribution to the budgetary disinvestment proceeds in the current financial year. The government has pegged the disinvestment receipts at ₹65,000 crore in the current fiscal, up from ₹13,531 crore in the previous fiscal.