LIC IPO gets SEBI nod

LIC on Tuesday has received capital markets regulator Sebi’s approval to raise funds through an IPO. LIC had in February filed its draft papers with the market regulator and in just 22 days, the IPO has received SEBI green signal.

The issue is likely to have reservations for eligible employees and policyholders of the company, according to the DRHP. One-third of the anchor portion will be reserved for domestic mutual funds.

The company will have up to 31,62,49,885 (31.62 crore) equity shares of the face value of Rs 10 on offer through the offer for sale , representing 5 per cent of equity stake. Shares of LIC are proposed to be listed on leading stock exchanges including the BSE and the NSE.

The government was expecting to garner Rs 63,000 crore by selling a 5 per cent stake in the life insurance firm. . however in the wake of the share market volatility caused by the raging conflict between Moscow and Kyiv, there might be a rethink on the timing of the LIC share sale.

A 5 per cent stake sale in LIC, which could have fetched Rs 65,000-70,000 crore, was enough to achieve the revised (RE) disinvestment receipt target of Rs 78,000 crore (down 56 per cent from the Budget estimate of Rs 1.75 lakh crore) for FY22. Without the LIC IPO, the government’s disinvestment receipts could be just Rs 15,000-20,000 crore in FY22. The government had set a modest Rs 65,000 crore disinvestment target for FY23.