Government-appointed intermediary, the Department of Investment and Public Asset Management (DIPAM), which conducted market assessments and found that the current situation is conducive for the listing of India's largest insurance company - the LIC - likely to meet investment bankers on Life Insurance Corporation of India (LIC) Initial Public Offering (IPO) today.
The government may file an updated draft red herring prospectus (UDRHP) of LIC's IPO with the market regulator Securities and Exchange Board of India (SEBI), according to sources cited by CNBC-TV18.
As per current DRHP, government has decided to dilute 5% Stake in LIC IPO.
The government was expecting to garner Rs 63,000 crore by selling a 5% stake in the life insurance firm to meet the curtailed disinvestment target of Rs 78,000 crore in the current fiscal.
The LIC public issue would be the biggest IPO in the history of the Indian stock market. Once listed, LIC's market valuation would be comparable to top companies like RIL and TCS.
The government is mulling the launch of initial public offering (IPO) of Life Insurance Corporation (LIC) by May.
The government's sale of about 31.6 crore shares or 5% stake in LIC, which was estimated to fetch around Rs 63,000 crore to the exchequer, was originally planned to be launched in March, but the Russia-Ukraine crisis has derailed the plans as stock markets are highly volatile.
A portion of the IPO would be reserved for anchor investors. Also, up to 10 percent of the LIC IPO issue size would be reserved for policyholders.
Also Read | LIC India’s profit rises to Rs 235 crore in December quarter
The government has time till May 12 to launch the LIC IPO without filing fresh papers with market regulator SEBI and if it misses the May 12 window available with it, LIC would have to file fresh papers with SEBI giving the results of December quarter and also update the embedded value.
LIC's embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors. Although the DRHP does not disclose the market valuation of LIC, as per industry standards it would be out 3 times the embedded value.
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