LIC IPO Launch On February 14? Govt Official Reveals Critical Details Of LIC IPO

LIC IPO Launch On February 14? Govt Official Reveals Critical Details Of LIC IPO
LIC IPO Launch On February 14? Govt Official Reveals Critical Details Of LIC IPO

The draft red herring prospectus (DRHP) or offer document of the Life Insurance Corporation’s (LIC) initial public offering (IPO) is expected to be out within two weeks. The statement was made by department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey hours after finance minister Nirmala Sitharaman said in her Budget speech that the LIC IPO is expected shortly.

Once the IPO is listed, LIC will have the potential to become one of the largest domestic companies in market capitalisation with the estimated valuation Rs. 8-10 lakh crore. At the post-Budget press conference, Sitharaman stated that LIC’s IPO will probably be floated in the current financial year. 

Pandey earlier said the government will list the country’s largest insurer LIC on the stock exchanges by the end of March, also the draft papers for the IPO are currently in the final stages and will be filed with market regulator SEBI soon for approval.

LIC’s IPO will help reach disinvestment goals 

“LIC disinvestment amount will be included in this year’s (Budget) because we aim to list it before March 31,” the top official was quoted as saying. The IPO of the insurance behemoth is paramount for meeting the disinvestment target set for the current fiscal which will be ending in March 2022.

The Budget 2021-22 had set the disinvestment target of Rs. 1.75 lakh crore, as compared with the Rs. 32,835 crore garnered in the last fiscal. From the Rs. 1.75 lakh crore, Rs. 1 lakh crore is going to come from selling government stake in public sector banks and financial institutions, and Rs. 75,000 crore will come from CPSE disinvestment receipts.

So far this fiscal, Rs. 9,330 crore had been wiped through minority stake sale in PSUs.

LIC’s profit

Earlier in this week, LIC reported a profit after tax of Rs. 1,437 crore for the first half (i.e. April to September) of the current financial year, compared to Rs. 6.14 crore in last year’s period.

As of September last year, the government has 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 initial public offering of the LIC. 


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