LIC receives SEBI nod for IPO to sell 31 crore shares but IPO dates not determined yet

• According to several media reports, market regulator SEBI has given a go-ahead to LIC for raising funds through IPO.
• The government looks to sell 31 crore equity shares through the IPO as per the DRHP.
• Up to 10% of the LIC IPO issue size would be reserved for policyholders.

State-owned insurance behemoth Life Insurance Corporation of India (LIC) has received market regulator Securities and Exchange Board of India’s (SEBI) nod ahead to raise funds through an initial public offering (IPO), according to several media reports.

The government is selling 31 crore equity shares through the IPO as per the draft red herring prospectus (DRHP) while 10% of the LIC IPO issue size is reserved for policyholders. The IPO is special for the 29 crore policyholders of the life insurer, who would be getting a preference on the shares.

The final approval of the IPO comes after 22 days of filing the draft red herring prospectus.

The government will sell 5% of its stake in the company to the public.

However, the date of the IPO launch is yet to be determined as the government would be having second thoughts on its launch this month. Not only Indian but entire global markets are under pressure and extremely volatile since the last few weeks.

Markets witnessed one of the huge crashes due to the ongoing war between Russia and Ukraine, which has hit the commodity markets and triggered inflation. Thus it may be possible that because of weak market conditions, the government would postpone the IPO.

Business Insider has mailed LIC to confirm the media reports of them receiving the SEBI nod. However, we have not received any response till the time of publishing.

Reportedly, the LIC IPO is expected to fetch around ₹60,000 crore, which is supposed to help the government in meeting its divestment target of ₹78,000 crore. The target is unlikely to be met if the government postpones the IPO.

LIC IPO is the biggest public issue in the history of the Indian stock markets followed by Paytm, Coal India and Reliance Power.

Also, once listed, LIC might be among the most valued Indian companies like Reliance Industries, TCS, Infosys and HDFC Bank.

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