LIC public issue likely to open on May 4, close on May 9

The much-awaited initial public offering of the Life Insurance Corporation of India is likely to open on May 4, CNBC TV18 reported on April 25, citing sources privy to the development.

The issue is expected to close on May 9, the report said, adding that the anchor book for the LIC IPO is likely open on May 2.

The Securities and Exchange Board of India has given its nod to the updated draft red herring prospectus, which lists a 3.5 percent stake sale instead of 5 percent as mentioned in the previous draft papers, the news channel reported.

There will be no greenshoe option in the IPO, the sources reportedly said.

The revised DRHP was submitted before the market regulator last week. The government, which wholly owns the insurance behemoth, plans to raise an amount of Rs 21,000 crore by selling around 22 crore shares which is equivalent to a 3.5 percent stake.

The LIC board, the news channel learnt from sources, will meet this week to finalise the price band for the IPO. The red herring prospectus will be submitted before Sebi by April 27, it added.

As per the LIC Act, the government can reserve up to 10 percent for the policyholders.

Also Read | With LIC IPO back on track, it’s crucial to strike the right stock price

By seeking Rs 21,000 crore for the revised holding on the block, the government is targeting a valuation of Rs 6 trillion for the insurer.

The IPO, notably, holds the key to the Centre's plan to meet its disinvestment targets. The government has pegged divestment receipts at Rs 65,000 crore for 2022-23, up from Rs 13,531 crore last fiscal.

The previous draft papers related to the IPO was filed with the Sebi in February, when the government had stated that it plans to sell 31.6 crore shares in a 5 percent stake sale in the state-run insurer.

The IPO plans, however, were deferred as the market faced volatility following the Russian invasion of Ukraine.