LIC IPO date is most likely to be announced by the government by the end of this week. According to reports, the center will take a call on the IPO soon.
The most awaited IPO was originally planned to be opened for subscription in March 2022 but was stalled due to the Russia Ukraine war. For the unversed, the government is aiming to sell 5 per cent of its stake in the form of 31.6 crore shares of the largest health insurer in India.
The government has time till May 12 to launch the IPO without filing fresh papers with the markets regulator Sebi.
The official said it would be a tough call to decide whether to go ahead with the retail and domestic investor demand or to wait for geopolitical tension to ease and FIIs to return to the market.
”A decision on timing the IPO would be taken this week,” the official told PTI.
There were estimates made in certain quarters that LIC’s market valuation would be about 2-3 times its embedded value. The official said that for a company of the magnitude of LIC, such a high multiplier to embedded value may not be correct.
The official further said the IPO price would have to be fixed in a way that on a listing day there is an upside to the stock and investors get rewarded.
IPO Valuation
The government is planning to raise about ₹30,000 crores, half of what it had earlier estimated, from selling a just over 5% stake in insurance behemoth Life Insurance Corporation of India (LIC) via initial public offering (IPO), as per a report by Reuters. Despite the halving of the government’s fundraising goal, it would still be India’s biggest IPO to date.
Officials want to complete the listing which will still be India’s biggest in the next two weeks, the people said, asking not to be identified as the deliberations aren’t public. LIC will probably be valued at some Rs 6 lakh crore, the people said.
As recently as April, Prime Minister Narendra Modi’s administration was looking to raise Rs 50,000 crore by selling as much as 7% of LIC, Bloomberg News had reported.
The stake sale now could be a little over 5% on muted demand from investors, the people said. Current approvals, including the draft prospectus, lapse on May 12.
Representatives for LIC and the finance ministry didn’t immediately respond to an email, message seeking comment. Business Standard newspaper had reported the revised stake sale plan earlier Friday.
The IPO would still be the country’s biggest ever, surpassing the listing of One 97 Communications Ltd., the operator of Paytm. It was raised about 183 billion rupees in November, according to data compiled by Bloomberg.
