For LIC's Public Issue, Government Has Time Until May 12 Without Fresh SEBI Okay: 10 Points

For LIC's Public Issue, Government Has Time Until May 12 Without Fresh SEBI Okay: 10 Points
A guide to the LIC IPO story
  1. The stake sale was planned to be launched in March 2022, but the Russia-Ukraine crisis derailed those plans as stock markets were highly volatile. The public issue of the insurance behemoth is likely by mid- and end-April, sources told NDTV. 
  2. The government was in touch with bankers and advisors on the DRHP and may offer to sell more than 5 per cent of its stake, CNBC TV18 had reported.
  3. Sources had told NDTV that the LIC's IPO was unlikely in the financial year 2021-22, driven by market volatility tracking the escalating Russia-Ukraine conflict.
  4. If the government misses the May 12 window available, LIC would have to file new papers for approval with SEBI. And if the LIC IPO is delayed, it will add to the growing list of planned offerings being put on hold as the war dampens investor appetite for risky assets.
  5. The government had filed updated draft papers with market regulator SEBI for the IPO, incorporating December quarter financials of the insurance behemoth after it filed the draft red herring prospectus (DRHP) for the IPO on February 13.
  6. If the share sale does not happen by May 12, the government will miss its disinvestment target by a wide margin.
  7. LIC's embedded value, which measures the consolidated shareholder's value in an insurance company, was pegged at about ₹ 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors. Although the DRHP does not disclose the market valuation of LIC, as per industry standards, it would be about three times the embedded value.
  8. The government was expecting to garner over ₹ 60,000 crore by selling about 31.6 crore or 5 per cent stake in the life insurance firm to meet the curtailed disinvestment target of ₹ 78,000 crore in 2021-22. 
  9. At a 5 per cent stake dilution, the LIC IPO would be the biggest ever in the history of the Indian stock market. Once listed, LIC's market valuation would be comparable to top companies like RIL and TCS.
  10. So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at ₹ 18,300 crore, followed by Coal India (2010) at nearly ₹ 15,500 crore and Reliance Power (2008) at ₹ 11,700 crore.
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