LIC IPO: Christopher Wood, Head (Global Equity Strategy), US Investment Bank Jefferies said that Life Insurance Corporation of India has the potential to become the largest stock in the Indian market.
Referring to the consequences of selling the government’s stake in Chinese companies in the 2000s, Wood said in his newsletter Greed and Fear that the listing of this important state-owned company could increase the market capitalization of the entire Indian stock market, which is currently 3.5 lakh crore dollars.
A large number of Chinese state companies were listed in the 2000s
Due to growth in the economy and a firming stock market, a large number of Chinese state-owned companies were listed on the public markets in the 2000s, becoming some of the world’s most valuable companies before the 2008 Global Financial Crisis.
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Estimated valuation of 12-15 lakh crores
Coming to India, LIC’s IPO is the most awaited event in the history of Indian capital market due to the large size as well as the profile of the company.
The public issue of the life insurance company is expected to come with a valuation of Rs 12 lakh crore to Rs 15 lakh crore, which could help the government meet its 2021-22 disinvestment target of Rs 78,000 crore.
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LIC’s 5% stake may be sold
It is estimated that LIC may file the Draft Red Hearing Prospectus (DRHP) for its IPO by the evening of Friday, February 11. The Insurance Regulatory and Development Authority (IRDAI) is understood to have given a green signal to LIC’s IPO proposal in a board meeting held on February 9.
According to a recent news from Bloomberg, the government may sell 5 percent stake in LIC. When the IPO is launched, it will be the biggest IPO in the history of the country.
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In November, fintech company One97 Communications broke the record for the biggest IPO with an issue of Rs 18,700 crore. Prior to this, the first IPO was a public issue of Coal India in 2010, through which about Rs 15,000 crore was raised.
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