LIC’s IPO will hit the market by March; Draft papers to be filed with SEBI by the end of January
Highlight
- Government to launch LIC’s mega public offer by March
- Finance Minister Nirmala Sitharaman reviewed the progress of LIC IPO last week
- LIC IPO crucial to meet disinvestment target of Rs 1.75 lakh crore set for March 2022
An official said the government will present LIC’s mega public offer by March and will file a draft document with markets regulator Sebi by the end of this month. Finance Minister Nirmala Sitharaman last week reviewed the progress of the initial public offering (IPO) of Life Insurance Corporation (LIC) in a meeting with top officials of the ministry.
The official said that the financial position of LIC for the September 2021 quarter is being finalized as well as the allocation of funds.
“We look forward to filing the DRHP (draft red-herring prospectus) with SEBI by the end of the month or early February. One thing is certain that the IPO will come before the end of the current financial year.
The LIC IPO is crucial to meet the disinvestment target of Rs 1.75 lakh crore set for the current financial year ending March 2022. So far this financial year, Rs 9,330 crore has been raised through PSU disinvestment.
In September last year, the government announced the mega initial public offering of the country’s largest insurance company LIC to 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd. was appointed to manage. ,
Other selected bankers include SBI Capital Markets Limited, JM Financial Limited, Axis Capital Limited, BofA Securities, JP Morgan India Private Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited.
Cyril Amarchand Mangaldas has been appointed as the legal advisor to the IPO. The government is in the process of deciding the quantum of government stake to be disinvested through the IPO.
The government is also considering allowing foreign investors to take stake in the country’s largest insurance company LIC. As per SEBI regulations, Foreign Portfolio Investors (FPIs) are allowed to buy shares in a public offering. However, since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI norms with regard to foreign investor participation.
The Cabinet Committee on Economic Affairs had approved the disinvestment of LIC in July last year.
Read also | Government refutes speculations of delay in LIC’s IPO, says- ‘Definitely’
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