LIC IPO: The Life Insurance Corporation of India is expected to submit the draft documents of its multi lakh crore initial public offering (IPO) in the last week of this month, according to reports. Touted as India’s largest public offering to date, the insurer will submit its draft documents to authorities the week of January 31. The LIC IPO is set to fetch Rs 15 lakh crore through the initial sale of the bid. The draft prospectus, due to be submitted soon, is likely to shed light on the scope of the IPO, reports say. The deliberations on the details of the IPO of the LIC are secret as of now.
According to a report from Bloomberg, the state-run insurer will also specify the number of shares for sale in its draft prospectus. According to the report, India is targeting a valuation of around Rs 15 lakh crore for the LIC IPO while a completed valuation is yet to be determined. The embedded value of the LIC is likely to be more than Rs 4 lakh crore while the market value of the company could be four times that. Once all this is settled, the final value of the IPO would be in, which can change depending on these factors.
“If investors agree with the calculations proposed by the government, LIC would join the league of India’s largest companies – Reliance Industries Ltd and Tata Consultancy Services Ltd – which enjoy a market capitalization of Rs 17 lakh crore rupees and Rs 17, respectively. Rs 14.3 lakh crore,” Bloomberg reported citing a source.
In this regard, the government has stepped up efforts to make the LIC IPO a success. From adjusting capital market rules to sending phone messages and publishing newspaper advertisements, the authorities are doing everything they can. A separate Bloomberg report states: “Prime Minister Narendra Modi’s government has identified the IPO — which could yield between rupees 400 billion ($5.4 billion) and rupees 1 trillion this quarter — as a key item on its economic agenda. , with proceeds from state investment. insurer essential to achieve a budget deficit target.”
According to an official quoted by Bloomberg, authorities will adjust and revise the rules on foreign direct investment to pique the interest of foreign investors and make the process easier. Shareholdings among foreigners are allowed for most Indian insurers, but not in LIC, a special entity created by an Act of Parliament, the report said.
The LIC has published advertisements and enticed domestic policyholders to make the upcoming IPO a success. “The best thing in life is to be prepared,” the LIC wrote in a newspaper ad last month. The company has also urged policyholders to link their PAN to their LIC to invest in the insurer’s shares.
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