LIC IPO likely to open on May 4 as govt proposes dates: Details here

The much-awaited initial public offering (IPO) of Life Insurance Corporation (LIC) is likely to open on May 4 and close on May 9, 2022, sources told Business Today on Monday. 

LIC Board will be meeting tomorrow to give an in principal approval to the above dates.

Government will be filing the RHP on Wednesday morning with key details on issue price, discounts, and reservation.

The LIC IPO issue size is likely to be Rs 21,000 crore, around 22.14 crore shares.

The government aims to offload 3.5 per cent of its holding in the insurance behemoth, subject to regulator approval. The IPO values LIC at Rs 6 lakh crore.

Earlier today, government of India had filed an updated draft red herring prospectus (DRHP) for the IPO, sources confirmed to Business Today.

The government had in February planned to sell 5 per cent stake or 31.6 crore shares in the insurance behemoth and had filed draft papers with market regulator SEBI.

However, the IPO plans faced headwinds from the ongoing market volatility due to the Russia-Ukraine war.

Last week, the government decided to lower the issue size to 3.5 per cent.

As the Securities and Exchange Board of India (SEBI) norms, companies with valuation over Rs 1 lakh crore have to sell 5 per cent stake in IPO.

LIC's embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors.

Based on investor feedback, the market value of government-owned LIC has been pegged at 1.1 times its embedded value or Rs 6 lakh crore.

LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current fiscal. The government has pegged disinvestment receipts at Rs 65,000 crore in the current financial year, up from Rs 13,531 crore mopped up last fiscal.

(With inputs from Karishma Asoodani, Rahul Srivastava)