Several milestones in the process are starting to surface as the government prepares for the LIC IPO listing over the upcoming month, despite gloomy expectations for inflation and the global market. To entice investors and make a good impression, the government is considering all options. According to media sources, the largest insurer in the nation is likely to submit an updated draught red herring prospectus (UDRHP) for the LIC IPO following discussions between the Department of Investment and Public Asset Management (DIPAM) and investment bankers and a crucial LIC board meeting.
According to the current DRHP, the government would sell 31.6 billion shares of its 5% investment in the insurance giant to raise Rs 63,000 billion. It would assist in achieving the Center's reduced disinvestment goal of Rs 78,000 crore for the current fiscal year. The main events that investors should be aware of are listed below.
Centre Plans to Pare Valuation
According to sources cited by The Economic Times, the LIC board will meet this weekend to "finalize its FY22 findings and thereafter file a revised public offer document by the middle of next week." Additionally, a government source stated that the listing "will be finished by May 12."
Following the board's approval of its results, the company will submit the updated documentation to the Insurance Regulatory and Development Authority of India (IRDAI). After the roadshows are through, there are rumblings of an issue launching towards the end of April.
LIC IPO Date
The government intended to start the LIC IPO by the 2022 fiscal year. The schedule was thrown off by the conflict between Russia and Ukraine and the choppy stock market. Nirmala Sitharaman, the finance minister, stated on March 1 that she would prefer to move forward with the plan because it has been planned for some time solely based on Indian considerations. But I wouldn't mind doing it again if general reasons dictate that I should." "A private sector promoter who accepts this call need just explain this to the board of the company. However, I would have to explain it to everyone "She went on to say. According to the sources, the government would likely launch the LIC IPO between April 25 and 29.
LIC IPO Reserved Portions
About 50% of the LIC IPO has been set aside by the government for Qualified Institutional Buyers (QIB). The amount for Non-Institutional Investors (NII) will be in the range of 15%. The LIC IPO's retail quota has been set at 35% of the offer. For domestic mutual funds, one-third of the anchor investor portion will be set aside.
A sizeable percentage of the public issue will also be set aside for the policyholders, but it shouldn't be more than 10%. Additionally, 5% of the LIC IPO will be allocated for staff. Employees and policyholders will both have the opportunity to purchase LIC IPO at a reduced price.
LIC IPO Anchor Investors Finalised
BlackRock, Sands Capital, Fidelity Investments, Standard Life, and JP Morgan are among the 50–60 anchor investors on the Centre's shortlist. The organization will soon finalize its anchor book.
Additionally, according to sources, there has been a lot of interest in the IPO from both domestic and foreign investors, with at least 12 of the top fund managers promising to contribute about Rs 18,000 crore as anchor investors.
The LIC public offering would be the largest IPO in Indian stock market history. When LIC is listed, its market value will be on par with leading corporations like Tata Consultancy Services and Reliance Industries Limited.