LIC IPO: Government officials have suggested mid- or end-April dates to an apex group of ministers to bring the country’s largest insurance company LIC (Life Insurance Corporation of India) initial public offer (IPO). This group of ministers includes Finance Minister Nirmala Sitharaman, Road and Transport Minister Nitin Gadkari and Commerce and Industry Minister Piyush Goyal.
This group of ministers can take a decision on this soon and can order the officials to start preparations for launching the IPO. The Department of Investment and Public Asset Management (DIPAM) and government-appointed intermediaries assessed the stock market and concluded that the current situation is favorable for listing of LIC.
The government first wanted to launch LIC’s IPO in the month of March. However, due to the volatility in the stock markets due to the Russia-Ukraine war, the government had to postpone its plan.
According to a report in the English newspaper Business Standard, LIC’s IPO is the biggest IPO in the country so far and the government wants to launch it before May 12. If the government delays more than this, it will have to file afresh the documents with the market regulator SEBI and get the embedded value of LIC again.
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Earlier, our affiliate channel CNBC TV-18 quoted sources as saying that the government is in touch with bankers and financial advisors regarding the Red Herring Prospectus (RHP). RHP refers to the offer document that the issuing company gives to the market regulator SEBI before listing. Along with RHP, the issue price of LIC’s IPO will be fixed. Also, it will be known when the issue of the company is opening. Sources also said that the government can sell more than 5% stake in the issue of LIC.
According to the draft red herring prospectus (DRHP) submitted to SEBI, the government will sell 31 crore equity shares. A portion of the IPO will be reserved for anchor investors. About 10% of the issue amount will be set aside for policyholders.
LIC’s IPO will be purely Offer for Sale (OFS). The government will sell its stake in this. No fresh issue will be issued. The government has 100% stake in LIC i.e. 632.49 crore shares. The face value of the shares of the company is Rs 10.