LIC IPO Update: Revised launch date, trimmed issue size. Key details here

The much-awaited Life Insurance Corporation of India’s (LIC) initial public offering (IPO) is undergoing several tweaks and changes to win investor confidence before it is launched in the coming days.

The size of the IPO has been trimmed to Rs 21,000 crore from Rs 55,000-60,000 crore and it may come with a greenshoe option of Rs 9,000 crore, Business Standard reported on April 22.

The total IPO size now amounts to Rs 30,000 crore and will lead to a five percent dilution of government stake in the insurance behemoth.

The recent tweak reduces LIC valuation from Rs 10-11 to Rs 6 lakh crore, which is 1.1 times the embedded value of Rs 5.4 lakh crore. Embedded value is a measure of the consolidated shareholders' value in an insurance company.

Also Read: Life insurance companies record 37% rise in new business premium in March

The government is likely to take a call on the timing of the IPO within this week. According to CNBC TV-18, it is expected as early as next week. The government has time till May 12 to launch the IPO without filing fresh papers.

If the IPO is not launched now it would have to be deferred till August or September as fresh papers with updated quarterly results and valuations would have to be filed.

The sale of 31.6 crore shares in the country's largest insurer was originally planned for March but the Russia-Ukraine war postponed it. The public issue will reserve 35 percent of its offer for retail investors, 10 percent for policyholders, and five percent for LIC employees.

The IPO would contribute a major chunk to the budgeted divestment proceeds in the current fiscal year. The government has pegged divestment receipts at Rs 65,000 crore for 2022-23, up from Rs 13,531 crore last fiscal.