The government on Sunday filed the draft papers with markets regulator Securities and Exchange Board of India (SEBI) for Life Insurance Corporation's (LIC) initial public offer (IPO), through which it hopes to sell 5 per cent equity stake.
According to sources, the public offer is expected to hit the capital market in March.
The government will sell over 31 crore equity shares of LIC, according to the draft red herring prospectus (DRHP) filed with the markets regulator.
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"The DRHP of LIC IPO has been filed today with the SEBI," department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey tweeted.
LIC IPO DRHP is available on the SEBI's website https://t.co/RZtSUnvmy7 pic.twitter.com/P9yyFsNWZC
— Secretary, DIPAM (@SecyDIPAM) February 13, 2022
Government aims to come out with the IPO and subsequent listing of Life Insurance Corporation (LIC) on bourses by March.
A portion of the IPO would be reserved for anchor investors. Also, up to 10 per cent of the LIC IPO issue size would be reserved for policyholders. Actuarial firm Milliman Advisors LLP India had worked out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
The IPO is seen as a test of investor appetite for new offerings, with a number of companies that listed last year now trading below their offer prices on concerns over lofty valuations and looming increases to interest rates by global central banks fighting inflationary pressures, Reuters reported.
The listing also comes against the backdrop of foreign investors pulling out funds from the domestic market just as the government seeks to meet a sharply trimmed divestment target for the current financial year.
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