LIC IPO: Govt likely to sell 5.5-6% stake

With the embedded value (EV) of LIC estimated Rs 5.4 trillion, a 5.5-6% stake could fetch the Centre Rs 70,000-80,000 crore as against the full FY23 modest disinvestment revenue target of Rs 65,000 crore.

LIC has reserved 50% of the net offer for qualified institutional buyers or QIBs, 15% for non-institutional bidders and 35% for retail individual bidders in accordance with the Sebi regulations.

The Centre will likely offer to sell a 5.5-6% stake in the final offer document for the mega IPO of Life Insurance Corporation (LIC), instead of 5% indicated earlier, a senior official told FE. The issue is likely to hit the market in “two to three weeks”, he added.

With the stock market stabilising and foreign investors shedding their post Ukraine-Russia conflict fears, the government is optimistic that the transaction will sail through smoothly in April, as they there is a lot of appetite for the insurance behemoth among institutional and retail investors, the official said.

Merchant bankers to the IPO have been asked to get quotes from potential anchor investors including sovereign wealth funds with regard to how much they are willing invest in the IPO and at what price in a week’s time, another official said. A pre-IPO placement of shares will be done in favour of anchor investors before the IPO opens for public subscription, setting the stage for pricing of the issue.

Source: https://www.financialexpress.com/market/ipo-news/lic-ipo-govt-likely-to-sell-5-5-6-stake/2481778/