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If LIC's IPO does not come in the market by May 12, then the government will have to submit the papers with SEBI again
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It has been reported that the Central Government may bring the IPO of Life Insurance Corporation (LIC IPO) in the next month i.e. in the first fortnight of May. There is a plan to raise about 50,000 crores through this IPO. People related to this matter has given this information.
Officials associated with the matter said that the government is considering of selling about 8 per cent stake in LIC through listing in the stock market. The approval period for LIC's IPO from SEBI is expiring on May 12. That's why the government wants to bring this IPO before that. If LIC's IPO does not come in the market by May 12, then the government will have to submit the papers with SEBI again.
The government is in touch with the bank and the financial advisor for the red herring prospectus. RHP is the document which contains information about price bands and share lots. It has to be submitted to SEBI. The value that the government and its advisors are looking to ask for for LIC ranges from 1.25 to 1.5 times its embedded value.
Embedded value is one of the indicators that measure the corporate value of a life insurance company. On 30 September 2021, the embedded value of LIC in Milliman Advisor, an international firm, was placed around Rs 5.40 lakh crore. However, the officials associated with the IPO are still discussing the possible terms of the offer. The fund raising target may also change in the next few days.
There has also been no response to the mail sent to the Union Finance Ministry. It is noteworthy that the government wanted to bring its IPO in the market in the last financial year itself. But, it was postponed due to global uncertainty.