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LIC IPO may set many trends for Indian stock market: Key things to know – Mint

Amid the recent IPO frenzy, all focus is now on India’s biggest ever public issue of state-owned Life Insurance Corporation of India’s (LIC). Forging ahead with the insurance behemoth’s public offering, the government will finalize investment bankers for LIC IPO this week with as many as 16 merchant bankers in the race to manage the much-awaited share sale. 

Many international bankers including Goldman Sachs, JPMorgan, BofA Securities have shown interest in managing the much-awaited offering and the 16 book-running lead managers will make a presentation before the Department of Investment and Public Asset Management (DIPAM) over the next two days. 

Experts believe that the LIC shares listing will act as a booster for the Indian stock markets as well as bring relief for the government in terms of its divestment target. “The IPO of LIC will set many trends. It will be the largest ever IPO in India. Also if the policyholders utilize the opportunity to subscribe to the proposed 10% of the IPO reserved for them, it will lead to the opening of several lakhs of Demat accounts further accelerating the equity cult in the country. The listing of the LIC share will help boost India’s market cap and bring the much-needed disinvestment proceeds to the government. A low will depend on how the IPO is priced,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Last week, a Finance Ministry official had said the about 60% of the insurance business will be with listed companies after the LIC IPO. Last month, the Union cabinet had cleared the listing of the insurance behemoth, which is expected to be listed in stock exchanges in the March quarter of this fiscal. IPO of India’s biggest insurer is part of the government’s efforts to raise 1.75 lakh crore through disinvestment in the current financial year.

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