government can start Initial Public Offering of Life Insurance Corporation (LIC) until the beginning of May. According to sources, it may offer to sell more than 5 per cent stake through a public offer.
Govt in touch with bankers and consultants to finalize company red herring prospectus As for the initial public offering, sources told CNBC-TV18. He also said that global economic uncertainties have been taken into account and volatility in the market has eased.
The state-owned insurer has already received capital markets regulator SEBI’s nod to raise funds through initial share sale. According to the draft Red Herring Prospectus (DRHP) filed with SEBI, the government will sell over 31 crore equity shares of LIC, a part of which will be reserve For anchor investors.
Up to 10 per cent of the IPO issue size will be reserved for policyholders, while up to 35 per cent for retail investors. The IPO is purely an offer for sale (OFS) by the government and there will be no fresh issue of shares by LIC. The government has 100 percent stake or more than 632.49 crore shares in LIC.
According to sources, the government has till May 12 to launch the LIC IPO without filing fresh papers with SEBI. “We have time till May 12 to launch the IPO based on the papers filed with SEBI. We are observing volatility and will soon file RHP giving the price band.”
The DHRP was filed on February 13. With five per cent stake dilution, the LIC IPO will be the biggest ever in the history of the Indian stock market and once listed, the market valuation of LIC will be at par with top companies like RIL and Tata Consultancy Services. TCS).
The company’s embedded value, which is a measure of the consolidated shareholders’ value in an insurance company, was pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman Advisors as of September 30, 2021.
To meet the disinvestment target of Rs 78,000 crore in the current fiscal, the government expects to raise Rs 63,000 crore by selling a five per cent stake in the life insurance firm. The amount raised from Paytm’s IPO in 2021 has been the biggest ever at Rs 18,300 crore. This was followed by Coal India (2010) with a turnover of around Rs 15,500 crore and Reliance Power (2008) with a turnover of Rs 11,700 crore.
According to the insurer’s website, LIC’s profit after tax increased to Rs 234.91 crore for the December 2021 quarter, from Rs 0.91 crore a year ago. Profit for the nine months ended December 2021 also rose to Rs 1,642.78 crore from Rs 7.08 crore a year ago.
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