LIC IPO: Center to file final IPO document with Sebi soon, says report

New Delhi: The government is planning to soon file final papers for LIC IPO with market regulator SEBI, detailing the price bands, discounts for policyholders and retail buyers and the actual number of shares to be placed on the block. will provide. said an officer.

The government is currently in wait-and-watch mode due to market volatility induced by the Russo-Ukraine war and will decide on the timing of Life Insurance Corporation’s (LIC) initial public offering (IPO).

“We have got the DRHP approval and the next step will be to file the RHP, which will give details of the price band and the actual number of shares. We are watching the situation, and soon we will take a call on the timing of the share sale,” a The official told PTI.

LIC had filed the draft red herring prospectus (DRHP) for LIC’s IPO on February 13. Earlier this week, Sebi had cleared the draft papers, paving the way for the sale of shares.

To meet the disinvestment target of Rs 78,000 crore in the current fiscal, the government was expecting over Rs 60,000 crore by selling around 31.6 crore or 5 per cent shares in the life insurance firm.

If the initial share sale doesn’t happen by March, the government will miss its revised disinvestment target for the current fiscal by a wide margin.

According to the draft prospectus, the embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, was pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman Advisors as of September 30, 2021.
Though DRHP does not disclose the market valuation of LIC, by industry standards it would be around 3 times the embedded value.

At 5 per cent stake dilution, LIC IPO will be the biggest ever in the history of Indian stock market and once listed, its market valuation will be at par with top companies like RIL and TCS.

So far, the amount raised from Paytm’s IPO in 2021 was the largest at Rs 18,300 crore, followed by Coal India (2010) at around Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

However, the government did not disclose the discounts offered to policyholders or LIC employees in the public offering in DRHP. As per the rules, up to 5 per cent of the issue size can be reserved for employees and up to 10 per cent for policyholders. Read also: Electric scooter prices may increase by up to Rs 45,000 by FY2025: Report

12,423.67 crore has been received so far through OFS, Employee OFS, Strategic Disinvestment and Buyback during the current financial year. Read also: Buying Apple iPhone 12? Here’s How You Can Get Huge Discounts on Amazon and Flipkart

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