LIC IPO Latest Update: Due to the ongoing war between Russia and Ukraine, inflation and interest rates are increasing continuously. In view of this, the Center has decided to cut the Public Offer Offer (IPO) valuation of its state-run Life Insurance Corporation of India (LIC) by 30 per cent. This means that investors can get LIC shares up to 30 percent cheaper in the IPO. This move will help the government to woo more and more investors.
LIC's promoter central government had estimated the company's valuation for the IPO at Rs 16 lakh crore in the initial proposal. According to two sources familiar with the matter, now the government wants to keep its valuation around Rs 11 lakh crore. The purpose of this deduction is to maintain the availability of money with the investors so that they can buy more after the shares are listed.
Government does not want to offend first time investors
The second purpose of this cut is that the government does not want to anger first time investors in the country's biggest share sale. There are a large number of LIC policyholders who have opened a demat account for investment. While submitting the draft documents for the IPO in February this year, the listed value of LIC was estimated to be three times the embedded valuation of Rs 5.39 lakh crore.
Price band will be decided according to the low price
According to a source, last week the Finance Ministry and its Department of Investment and Public Asset Management (DIPAM) held a meeting with investment bankers. In this, the investment bankers were asked to fix the price band of LIC's shares according to the lower price. The finance ministry and DIPAM officials had asked to fix the price band on the basis of double the embedded valuation of Rs 5.39 lakh crore.
7.5 percent stake may be sold
According to another source, the government wants to sell its 5 to 7.5 percent stake in LIC. In such a situation, the actual valuation of this upcoming IPO can now be around Rs 37 thousand crores. Earlier the government's plan was to bring an IPO in March. But it has been delayed due to volatility in the markets due to Ukraine war. Now the government plans to launch an IPO by the end of April or in May.
Expect to submit new documents
LIC's board may meet by the end of this week. Financial results for the financial year 2022 can be finalized in this meeting. Thereafter, new documents are expected to be submitted for the IPO with SEBI.
