LIC IPO : In order to clear the way for foreign investors regarding LIC IPO, an important meeting of the Union Cabinet is going to be held today. In this meeting, the way of investment for foreign investors will be opened by changing the LIC law.
LIC IPO is very important for the government . If this IPO is to be made a superhit, then the participation of foreign investors is necessary .
In order to clear the way for foreign investors, an important meeting of the Union Cabinet is going to be held today. In this meeting, a proposal to bring changes in FDI policy to facilitate disinvestment in LIC will be considered.
The Department for Promotion of Industry and Internal Trade (DPIIT) has taken this proposal forward after consulting the Finance Ministry. As per the existing FDI policy, 74 per cent foreign investment is allowed in the insurance sector under the automatic route.
However, this rule is applicable to the Life Insurance Corporation of India (Life Insurance Corporation ) does not apply. Its management is under a separate law LIC Act.
As per the norms of market regulator SEBI, both FPI (Foreign Portfolio Investors) and FDI are allowed under public issue offer. Since there is no provision for foreign investment in the LIC Act, there is a need to make the proposed
LIC IPO in line with SEBI norms regarding foreign investor participation. The Cabinet had approved the initial public offering of LI in July last year. LIC has applied for this issue before the market regulator SEBI.
Government can raise 60 thousand crores
DRHP i.e. IPO proposal was submitted to SEBI on 13th February on behalf of LIC. The government is going to sell its 5 percent stake in LIC. It is believed that through this the government can collect a fund of 60-63 thousand crores.
In this IPO, the government will issue 31.6 crore shares. The policyholders and employees of LIC will be offered a lower price than the issue price. Apart from this, there will also be reservation in subscription for them.
Market value close to 16 lakh crores
According to the documents submitted to SEBI, the embedded value of LIC is estimated at Rs 5.4 lakh crore. This is as of 30 September 2021. At present, its market value information has not been given. The market believes that the market value of LIC can be Rs 16 lakh crore.
Now Paytm’s IPO name record
LIC IPO will be the biggest IPO in the history of India. At present, this title belongs to Paytm, which entered the stock market in 2021. This IPO was worth Rs 18300 crores. In 2010, the IPO of Coal India came which was of Rs 15500 crores. Reliance Power’s IPO came in 2008, which was worth Rs 11700 crore.
