New Delhi: The initial public offering (IPO) of India’s biggest insurer Life Insurance Corporation of India (LIC) seems unlikely in this financial year 2021-22, according to NDTV report. The government may delay the LIC’s mega IPO on market volatility as the Russia-Ukraine conflict rages on, they added.
While the Centre has till May 12 to launch the LIC IPO without having to file new papers with markets regulator SEBI, sources claim that a listing in early April is improbable due to the seesaw nature of news flow from the continuing Russia-Ukraine crisis.
The government filed the Draught Red Herring Prospectus (DRHP) for the IPO with SEBI on February 13, and it received permission last week.
The government is planning to sell about 31.6 crore shares or 5 per cent stake in LIC, estimated to fetch around ₹ 60,000 crore to the exchequer.
At 5 per cent stake dilution, the LIC IPO would be biggest ever in the history of Indian stock market and once listed LIC’s market valuation would be comparable to top companies like RIL and TCS.
LIC’s embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at about ₹ 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors. Although the DRHP does not disclose the market valuation of LIC, as per industry standards it would about 3 times the embedded value.
LIC has reserved up to 35 per cent of its total IPO size for retail investors.
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