According to a report published by Financial Express, the draft red herring prospectus (DHRP) or offer document of the Life Insurance Corporation’s (LIC) is likely to be filed between February 8 to February 10 – sources told FE. The Finance Minister Nirmala Sitharaman said in her Budget speech that LIC IPO is expected shortly.
Nirmala Sitharaman had, days before Budget 2022 presentations, calculated the progress of the initial public offering (IPO) of LIC in a meeting that included the top official of the ministry. The government had also recently stretched the tenure of LIC chairman MR Kumar by one year with a view to facilitating the smooth listing of the insurance behemoth. Kumar will reportedly continue as chairman of LIC till March 2023.
The Indian government has urged the market regulator-SEBI to complete its vetting process in less than three weeks instead of the 75 days it usually requires.
The government holds a 100% stake in LIC. Once listed, it is likely to become the country’s biggest company by market capitalization with an estimated valuation of ₹8-10 lakh crore.
LIC IPO is significant for meeting the ₹1.75-lakh crore disinvestment target set for the current fiscal year ended in March 2022. Till now this fiscal, ₹9,330 crore has been mopped up through PSU disinvestment.
The Prime Minister had in September last year, appointed 10 merchant bankers, including Goldman Sachs ( India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd to manage the mega initial public offering of the country’s largest insurer LIC.
According to SEBI rules, foreign portfolio investors (FPI) are permitted to buy shares in the public offer. However, since the LIC Act has no provision for foreign investment, there is a need to align the proposed LIC IPO with SEBI norms regarding foreign investors participation.
