Indian’s Biggest IPO Can Launch On May 4th And End On May 9th: Share Price Not Decided Yet? Govt’s Stake Reduces?

The IPO of LIC has been making waves since the news of its going public surfaced. As per a source privy to the development, the much awaited IPO could open on May 4.

The report said that the issue is expected to close on May 9. It also added that the anchor book for the LIC IPO is likely open on May 2.

3.5% Stake Sale Instead of Previous 5%

As compared to 5 % sale, the updated draft red herring prospectus which listed a 3.5% sale of LIC has received a green signal from The Securities and Exchange Board of India(SEBI).

The sources reportedly said that there will be no greenshoe option in the IPO.

The government, which currently owns the LIC wholly and solely, intends to raise an amount of Rs 21,000 crore by selling around 22 crore shares which is equivalent to a 3.5 percent stake.

Price Band To Be Finalized

As per the reports, the red herring prospectus will be submitted before Sebi by April 27 by the LIC board and will also have a meeting and finalize the price band of the IPO.

As per the LIC Act, the government can reserve up to 10 percent for the policyholders.

The government is targeting a valuation of Rs 6 trillion for the insurance behemoth by seeking to raise Rs 21,000 crore from the 3.5% stake sale.

For 2022-23, the government has pegged divestment receipts at Rs 65,000 crore. The number was Rs 13,531 crore last fiscal. The IPO, notably, holds the key to the Centre’s plan to meet its disinvestment targets.

It was in the previous draft papers in the month of February that was filed with SEBI which stated that the government intends to sell 31.6 crore shares in a 5 percent stake sale in the state-run insurer.

However, in the light of market volatility and foreign capital withdrawal from the Indian markets, the IPO was stalled