LIC IPO: Under the mega IPO of LIC (Life Insurance Corporation), not only will the Offer for Sale (OFS) be brought to sell the government stake, but it can also issue new equity shares. The Department of Investment and Public Asset Management (DIPAM) on Thursday said this. Proposing to appoint a legal banker, legal advisor and bankers for the issue, it was said that under this process of listing LIC in the stock market, not only the government will bring an offer for sale to sell its stake but also raise new equity share capital. LIC’s IPO may come by January, 2022. It is being said that this will be the biggest IPO in the country. Public issue can be of 65 to 75 thousand crores.
Shocking move to issue fresh equity shares
The government has been trying to disinvest LIC for a long time. But the decision to issue fresh equity shares is a shocking step. However, how big the issue size will be, it has not been decided yet. HDFC Securities Head of Retail Research Deepak Jasani told Financial Express Online that LIC does not want to re-enter the market in the next two-three years. Therefore, after cleaning the book, she wants to make complete arrangements for the capital. She wants to keep this option ready for the next two-three years. However, it is not yet certain whether the company will adopt this option. Preparations have started to bring LIC’s IPO in the market but it is still in very early stage.
LIC IPO: Cabinet approval for LIC’s IPO, now a committee headed by Finance Minister will decide the issue size and price
Amendment in IPO rules for large companies
The government has recently amended the rules related to listing of companies with a market capitalization of more than Rs 1 lakh crore. According to these amendments, such companies can now sell their 5 percent stake through IPO. However, such companies will have to increase their public shareholding to 10 per cent in two years. This stake will have to be increased to 25 per cent in five years. To bring the IPO, the government has allowed LIC to increase its authorized share capital to 25 thousand crores.