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India’s Largest IPO Opens On May 4 -By ASC

LIC IPO: “LIC 3.0” kicks off with the opening of India’s largest IPO on May 4th

The Life Insurance Corporation’s (LIC) public issue offer has finally arrived, with the long-awaited initial public offering (IPO) opening on May 2 for major investors and from May 4 to May 9 for the public, the insurance giant confirmed on Wednesday. the press conference.

The start of “LIC 3.0”, said LIC Chairman MR Kumar, refers to India’s largest public issue, which will be in the ₹ 902-949 price group, with a Rs 60 discount to policyholders and a Rs 45 discount for retail investors and employees.

The employee booking share is 5 percent of the post -offer equity share capital, and the policyholder booking share is 10 percent of the offer size.

On Saturday, the LIC board approved a reduction in the size of its IPO issue to 3.5 percent from 5 percent, the company said. The government will now sell its 3.5 per cent stake in LIC for ₹ 21,000 crore, valuing the insurance giant at 6 lakh crore.

DIPAM secretary Tuhin Kanta Pandey said the size of the LIC IPO was accurate, given market constraints.

The decision to list it now was taken in accordance with market demand and stabilizing market conditions, he added.

Government sources said on Tuesday that depending on demand and subscriptions on the IPO, there is an option for the government to increase the stake offer to 5 per cent, in which case the state fund will raise ₹ 30,000 crore from the sale of its shares. equity.

But a drastic drop in ambitions for an IPO would be a setback for the government and challenge its fiscal balance as the diversion of investment is placed and aimed at adding to the country’s savings.

Whether the final offer is a 3.5 per cent stake sale for 21,000 crore or 5 per cent for ₹ 30,000 crore, LIC’s IPO will be the largest in India.

Indeed, the size of the public issue at Rs 21,000 crore lowered will be larger than the amount mobilized from Paytm’s IPO in 2021 – which is the largest currently at Rs 18,300 crore, followed by Coal India (2010) at almost Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

Previously, the government expected to raise over Rs 60,000 crore by selling about 31.6 crore or 5 per cent stake in a life insurance firm to meet the investment reduction target of Rs 78,000 crore in 2021-22.

The sale of the stake was initially planned to launch in March 2022, but the Russia-Ukraine crisis thwarted the plan because the stock market was highly volatile.

The government has until May 12 to launch the LIC IPO without having to file new papers including finance with the Securities and Exchange Board of India (SEBI).

If the government misses the available May 12 window, the LIC will have to file a new paper for approval with SEBI. And any further delay in LIC’s IPO will add to a growing list of planned deals that have been delayed because the war has dampened investors ’appetite for risky assets.


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