LIC likely to launch $8 billion IPO on 11 March; all you need to know

The public issue of Life Insurance Corporation of India (LIC) is expected to open for anchor investors on 11 March, according to news agency Reuters.

The Initial Public Offering (IPO) of the country’s largest insurer is expected to open for investors some days later, as per the agency.

The public issue is expected to be the largest in the country, with an estimated value of $8 billion. The record for the largest public issue in India is currently held by Paytm at $2.5 billion.

According to Reuters, the public issue is expected to gain regulatory approval by the first week of March this year, after which more details, such as the price band of the equity shares, will be revealed.

LIC had filed its draft red herring prospectus (DRHP) with the Securities Exchange Board of India (SEBI) recently. According to the DRHP, the Centre, which owns 100 percent stake in LIC, will offload about 316,249,885 equity shares. The shares represent five percent of the company.

Furthermore, the IPO of Life Insurance Corporation of India will purely be an offer for sale. As per reports, the LIC shares will have a face value of Rs 10.

The public issue of LIC is crucial for the Union government’s disinvestment targets this fiscal, ending March 2022. The Centre fulfil its ambitious disinvestment target of Rs 78,000 crore through sale of its stake in public sector financial institutions and banks.

Till date, it has raised approximately Rs 12,000 crore through privatisation of Air India and stake sale in other public sector units.

Earlier, the government had set its disinvestment target as Rs 1.78 lakh crore.

As per the DRHP, the LIC IPO will be managed by SBI Capital Market Ltd, JM Financial Ltd, Axis Capital Ltd, JP Morgan India Pvt Ltd, Goldman Sachs (India) Securities Pvt Ltd, Kotak Mahindra Capital, Citigroup Global Markets India and Nomura Financial Advisory and Securities (India) Pvt Ltd, among others.

LIC is the fifth largest global insurer and the tenth largest  worldwide in terms of terms of total assets. The company remains the largest asset manager in India. LIC had earned a profit after tax of Rs 1,437 crore in the first half of FY2021-22.

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