LIC IPO: Government of India has asked the regulators to review the draft prospectus of Life Insurance Corporation at the earliest. Two government sources with knowledge of the matter said that the government wants to resolve the problems related to the country’s biggest IPO by the end of March. He said the Securities and Exchange Board of India (SEBI) has been asked to complete its investigation process in less than three weeks, which normally takes 75 days.
Other privatization plans postponed due to LIC
In a report in Economic Times, a government official said, “We have 10 bankers for the deal. They are available 24 hours a day to answer any queries from SEBI. A “clean” draft prospectus will be submitted to SEBI, he said. The official also said that the government’s disinvestment department’s full focus is on the IPO of the government-backed insurance company, which is expected to fetch around $12 billion, and has led to the postponement of other privatization plans this fiscal.
Estimated submission of draft in next few days
Sources said the draft prospectus is expected to be submitted with Sebi in the next few days. The finance ministry, Sebi and LIC did not respond to a request from Reuters.
With reiterating the resolve to list LIC by the end of the financial year, the Prime Minister Narendra Modi government wants to revive its privatization program with the aim of avoiding any losses and filling the exchequer.
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LIC has 65% market share
With assets of around $500 billion and 65% market share in life insurance policies in India, LIC is making every effort to make its IPO a success. In addition to voluminous advertisements in local newspapers, 1.2 million agents have been hired to turn over 250 million policyholders into first-time retail investors.
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Government can sell up to 10 percent stake
However, how successful LIC’s stock sale will be, it still remains a big question. The government expects to get $12 billion from the IPO. Government and banking sources said that while securing this money by selling 5 per cent stake in LIC would be a sign of its success, but the government is also looking at selling up to 10 per cent stake.
success is not easy
A Mumbai-based investment banker working on an IPO said, “We have never seen an issue of such a large size in the Indian market and even though we know that a company like LIC will attract attention, it is not that easy either. ” “There is still a lot of work to be done to make this IPO a success,” he said.
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