The Life Insurance Corporation’s (LIC) long-awaited public issue offer is likely to open on May 4 and close on May 9, according to sources, who said the exact timelines would be confirmed post-April 27.
The exact date ranges and other details of the LIC’s initial public offering (IPO) will be confirmed next week, the sources added.
That comes on the heels of the LIC board approving a cut in its IPO issue size to 3.5 per cent from 5 per cent, according to sources on Saturday.
The government is now expected to sell 3.5 per cent of its stake in LIC for Rs 21,000 crore, subject to the approval of the capital markets regulator Securities and Exchange Board of India, SEBI.
That would value the insurance behemoth at 6 lakh crore.
A significant cut in valuation from a previous estimate of around Rs 17 trillion for the 66-year old company.
The draft red herring prospectus filed with the SEBI and approved showed the government had proposed a sale of its 5 per cent equity.
Still, despite that setback and lowering of the company’s valuation, it would be India’s most significant to date.
Indeed, the public issue size of the insurance behemoth at the lowered Rs 21,000 crore will be larger than the amount mobilised from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.
The stake sale was initially planned to be launched in March 2022, but the Russia-Ukraine crisis derailed those plans as stock markets were highly volatile.
Previously, the government was expecting to garner over Rs 60,000 crore by selling about 31.6 crore or 5 per cent stake in the life insurance firm to meet the curtailed disinvestment target of Rs 78,000 crore in 2021-22.
But the drastic lowering of ambitions for the IPO would be a setback for the government and challenge its fiscal balances as the disinvestment was positioned and aimed at replenishing the state’s coffers.