LIC IPO size might be cut to ₹30,000 crore, says report

• IPO size of LIC is reportedly being slashed by 40% to approximately ₹30,000 crore.
• Earlier, the LIC IPO was expected to fetch around ₹60,000 crore.
• The country’s biggest IPO might finally get launched in May.

State-owned insurance behemoth Life Insurance Corporation of India (LIC) is said to cut down its initial public offering (IPO) size and do not want to risk all due to valuation concerns amid Russia-Ukraine crisis.

A Bloomberg report said that the IPO will be slashed by 40% to ₹30,000 crore from earlier estimates of around ₹60,000 crore.

Earlier, LIC IPO was supposed to be listed by March 2022 for the government to meet the divestment target.

But the unexpected Russia-Ukraine conflict triggered one of the huge market crashes, which hit the commodity markets and triggered inflation. This led the government to postpone the IPO.

As per the original draft red herring prospectus (DRHP), the government is looking to sell 31 crore equity shares or 5% stake in the company through the IPO.

The wait for the LIC IPO, which is the largest ever public issue in the history of Indian capital markets, seems never ending.

LIC’s DRHP was filed by the government in February and reportedly they have time till May 12 to launch the LIC IPO without filing fresh papers with market regulator Securities and Exchange Board of India (SEBI). If the LIC IPO is not launched within the date then the government will have to file updated DRHP with the latest December quarter earnings.

The IPO is special for the 29 crore policyholders of the life insurer, who would be getting a preference on the shares. 10% of the LIC IPO issue size is reserved for policyholders who would get some discount on the issue price.


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