LIC IPO: The government has changed the Foreign Exchange Management Act’s requirements, which is a significant development in the run-up to the life insurance giant’s listing (FEMA). The action has made it possible for LIC to receive up to 20% more foreign direct investment (FDI). To implement the previously approved and updated Foreign Direct Investment (FDI) policy and enable international participation in the massive initial public offering, the FEMA notification is necessary (IPO)
The IPO for LIC would be the largest in Indian stock market history. 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. When LIC gets listed, its market value will be on par with leading businesses like RIL and TCS. The greatest amount to date was raised via the IPO of Paytm in 2021, raising Rs 18,300 crore. Coal India (2010) raised around Rs 15,500 crore, and Reliance Power (2008) raised Rs 11,700 crore, respectively. The main events that investors should be aware of are listed below.
LIC IPO: Updated DRHP
After discussions between the Department of Investment and Public Asset Management (DIPAM) and investment bankers and a crucial meeting of the LIC board, the largest insurer in the nation is expected to publish an updated draught red herring prospectus (UDRHP) for the LIC IPO.
LIC IPO: Reduced Valuation
The LIC board is likely to decide on reducing the valuation of the company and offering more shares in its initial public offer which will make the float more attractive to many of its policyholders who are first-time investors. Compared to an earlier valuation of Rs 16 lakh crore, the government is now expecting an IPO valuation of approximately Rs 11 lakh crore.
LIC IPO: Listing 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.” “When a private sector promoter takes this call, he needs to just explain this to the company’s board. 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: Centre Wooing Sovereign, Pension Funds
Among other sovereign wealth funds and pension funds, the government has contacted Abu Dhabi Investment Authority, Singapore-based GIC, three Canadian pension funds, and Qatar Investment Authority about becoming anchor investors in Life Insurance Corporation (LIC) of India’s first public offering (IPO).