It is reported from the media that LIC’s IPO has been approved by the market regulator SEBI. According to DRHP, the government will sell more than 31 crore equity shares under LIC’s IPO.
LIC IPO: A big news is coming about the Initial Public Offering (IPO) of Life Insurance Corporation of India (LIC). CNBC-TV18 is quoted as saying that LIC’s IPO has got approval from market regulator SEBI. According to the draft red herring prospectus (DRHP) filed with the market regulator, the government will sell over 31 crore equity shares under LIC’s IPO. A part of the issue will be reserved for anchor investors. Also, up to 10 per cent of the issue size will be reserved for policyholders. Let us tell you that DRHP i.e. IPO proposal was submitted to SEBI on 13th February on behalf of LIC.
OFS based IPO only
The government was hoping to raise Rs 63,000 crore by selling 5 per cent stake in the life insurance firm to meet its disinvestment target of Rs 78,000 crore in the current fiscal. Let us inform that on February 13, DRHP i.e. IPO proposal was submitted to SEBI on behalf of LIC. This IPO is an Offer for Sale (OFS) by the Government of India and no fresh shares will be issued by LIC in this. The government has 100% stake in LIC or more than 632.49 crore shares. The face value of the shares is Rs 10 per share.
Biggest IPO!
LIC’s issue will be the biggest IPO ever in the Indian stock market. After listing, the market valuation of LIC will be at par with top companies like RIL and TCS. Prior to this, Paytm’s issue was the biggest and the company had raised Rs 18,300 crore from IPO last year. After this, Coal India raised about Rs 15,500 crore in the year 2010 and Reliance Power raised Rs 11,700 crore in the year 2008.
20% FDI allowed in LIC
Recently, the Union Cabinet has changed the FDI policy to include foreign investors in this IPO. Under this change, foreign investment has been allowed in LIC’s IPO under the automatic route up to 20 percent. At present, 74 percent FDI has been approved in the insurance sector under the automatic route.
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