LIC IPO: In view of the huge volatility in the domestic market due to the uncertainty in the global stock markets due to the Russia-Ukraine war, the government is considering a cut in the valuation of LIC.
Its valuation can be reduced by about 30 percent. The government is taking this step to increase the attractiveness of investors in IPO.
The government is considering a cut in the valuation of Life Insurance Company of India (LIC) in view of the huge volatility in the domestic market due to uncertainty in global stock markets due to the Russo-Ukraine war. Its valuation can be reduced by about 30 percent. The government is taking this step to increase the attractiveness of investors in LIC’s IPO.
According to Live Mint, sources say that the government wants to keep the valuation of LIC, the country’s largest insurance company, around Rs 11 lakh crore. Earlier a valuation of Rs 16 lakh crore was planned. Despite the cut in valuation,
this will be the biggest IPO in the country. Earlier, LIC’s IPO was to be brought in March. After Russia’s attack on Ukraine on February 24, the government postponed the plan after volatility in stock markets around the worl
The government is reducing because valuation
experts say that reducing the valuation can increase the attractiveness of investors in LIC’s IPO. This will increase the chances of listing gains for the investors. According to sources in CNBC-TV18, the government may submit the updated draft Red Herring Prospectus (DRHP) to SEBI for this IPO. In the DRHP sent earlier, the government had planned to sell 5 per cent stake in LIC.
Will be special in
many ways The IPO of the country’s largest insurance company will be special in many ways. Investors have been waiting a long time for this. After listing, LIC will be included in the largest companies of the country. Reliance Industries is currently the largest company in the country, while TCS is in second place. However, after the merger of HDFC, HDFC Bank will also come in the line of the largest companies.
IPO may come next month
The government is planning to bring LIC’s IPO in the market by next month i.e. May. In this, the government can sell five percent stake i.e. 316 crore shares. It is estimated to get about Rs 63000 crore from this. Earlier this IPO was to come in March.
What is special for policyholders
A part of this issue will be reserved for anchor investors. The insurance company will also give an opportunity to its policyholders to invest. 10% of the shares can be reserved for them. If the government does not submit the new DRHP to SEBI, then it will have to launch the IPO in the market by May 12.
