LIC IPO more likely to open on May 4: Report

The preliminary public providing of the nation’s largest insurer LIC will open on May 4 and shut on May 9, sources stated.

The IPO, via which the federal government will promote a 3.5 per cent stake in state-owned Life Insurance Corporation (LIC), will fetch Rs 21,000 crore to the exchequer.

The IPO values LIC at Rs 6 lakh crore.

The authorities had in February deliberate to promote a 5 per cent stake or 31.6 crore shares within the insurance coverage behemoth and had filed draft papers with Sebi.

However, the IPO plans confronted headwinds from the continued market volatility as a result of Russia-Ukraine conflict.

Last week, the federal government determined to decrease the difficulty measurement to three.5 per cent.

The authorities has additionally filed papers with Sebi searching for exemption from the 5 per cent stake sale norm, sources stated.

As the Securities and Exchange Board of India (Sebi) norms, firms with valuation over Rs 1 lakh crore must promote 5 per cent stake in IPO.

LIC’s embedded worth, which is a measure of the consolidated shareholders worth in an insurance coverage firm, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by worldwide actuarial agency Milliman Advisors.

Based on investor suggestions, the market worth of government-owned LIC has been pegged at 1.1 occasions its embedded worth or Rs 6 lakh crore.

LIC IPO would contribute a significant chunk to the budgeted disinvestment proceeds within the present fiscal. The authorities has pegged disinvestment receipts at Rs 65,000 crore within the present monetary yr, up from Rs 13,531 crore mopped up final fiscal.