LIC expected to bid for Zomato’s Rs 9,375 crore IPO

A bid for Zomato’s IPO would mark a major shift for India’s largest insurance firm that generally invests in secondary markets.

The state-owned insurance giant, Life Insurance Corporation of India (LIC), is understood to be mulling the option of taking part in the initial public offering (IPO) of Zomato, according to a report by livemint.com. Food delivery platform Zomato’s IPO has already caused a significant buzz on Dalal Street and the participation of LIC, which primarily invests in the secondary market, would certainly raise the stakes.

Quoting two people aware of the matter, livemint.com reported that LIC is expected to bid for shares of Zomato in the upcoming IPO which opens on July 14. The final decision regarding the bid would be taken by LIC’s investment committee, another source told the publication.

Zomato’s IPO worth Rs 9,375 crore will be open for bids from 14-16 July. It comprises fresh shares and an offer for sale(OFS) that would be available for investors at a price band of Rs 72-Rs 76.

Notably, the government of India-owned LIC generally invests in secondary markets. It participates in primary markets only in the case of public sector units(PSUs) when the government wishes to divest its stake. Over the years, the insurance firm has picked up stakes in several PSUs including- NTPC, New India Assurance, Bharat Dynamics, Hindustan Aeronautics Ltd. among others. A bid for Zomato’s IPO would mark a major shift for India’s largest insurance firm.

LIC’s own IPO is expected to hit the markets this year. The union finance minister Nirmala Sitharaman had announced the decision of divestment from LIC during her annual budget speech in February 2021. The Modi government is engaged in making several regulatory and structural changes in LIC to make it eligible to get listed in the stock markets.

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