LIC IPO gets once step closer to becoming reality

LIC IPO

Last Updated: Dec 14, 2022 - 02:23 am 58.7k Views
Listen icon

It looks like the government is setting out on the LIC IPO on a war footing. The Department of Investments and Public Assets Management (DIPAM) has sent out request for proposals for bankers, registrars and legal advisors to the issue. The IPO is proposed to hit the market around January 2022. There appears to be a small change in the IPO structure. Originally, it was supposed to be just an offer for sale by the government. However, now it is proposed to be a combination of new issue and an offer for sale.

The IPO rules were earlier amended too allow companies with indicative market capitalization of over Rs.100,000 crore to sell just 5% of their shares through the IPO. The legal amendments needed in the Life Insurance Corporation Act have already been proposed and passed as part of the Finance Bill in both the Houses of Parliament. Hence, the complex task of approvals for change in ownership, change in investment pattern and a new dividend distribution policy are already in place. Under the new IPO rules, the company can divest just 5% if market cap is more than Rs.100,000 crore subject to 10%  divestment within 2 years and 25% dilution in 5 years. This would mean a series of capital raising by LIC.

Also Read: LIC IPO Government Approval

While the final details are awaited, the LIC IPO is expected to be to the tune of around Rs.70,000 crore. That would be substantial progress for the government towards its coveted Rs.175,000 crore disinvestment target for the fiscal year 2021-22. It will also create a listed corporate behemoth that would be larger than Reliance in terms of market cap when it lists.
 

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

oda_gif_reasons_colorful

About the Author

Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 01 April 2024

Swing Trading Stocks for the Week

Weekly Market Outlook for 1st April to 5th April

The week gone by was a truncated week of three trading sessions, but it was not short of any action as the index witnessed a smart recovery in three days. Nifty almost tested the previous all-time high above 22500 on the expiry day and ended just above 22300 with weekly gains of a percent.

Stock in Action – Bajaj Finance

Bajaj Finance Movement of Day