The government on Sunday submitted the draft documents to the market regulator Securities and Exchange Board of India (SEBI) for the initial public offer (IPO) of Life Insurance Corporation (LIC), hoping to sell a 5 percent equity stake.
According to sources, the public offer on the capital market is expected in March.
The government will sell more than 31 crore shares of LIC, according to the draft red herring prospectus (DRHP) filed with the market regulator.
“The DRHP of LIC’s IPO has been filed with the SEBI today,” tweeted Tuhin Kanta Pandey, secretary of the Department of Investment and Public Asset Management (DIPAM).
LIC IPO DRHP is available on SEBI website https://t.co/RZtSUnvmy7pic.twitter.com/P9yyFsNWZC
— Secretary, DIPAM (@SecyDIPAM) February 13, 2022
The government aims to launch the IPO and subsequent listing of Life Insurance Corporation (LIC) on stock exchanges in March.
A portion of the IPO would be set aside for anchor investors. Also, up to 10 percent of the size of the LIC IPO issue would be reserved for policyholders. Actuary Milliman Advisors LLP India had worked out the embedded value of LIC, while Deloitte and SBI Caps were appointed as pre-IPO transaction advisors.
The IPO is seen as a test of investors’ appetites for new offerings, with a number of companies that listed last year now trading below their bid prices amid concerns over high valuations and impending rate hikes by global central banks fighting inflationary pressures, Reuters reported.
The IPO also comes against the backdrop of foreign investors withdrawing funds from the domestic market just as the government aims to meet a heavily trimmed divestment target for the current fiscal year.