Finance Minister Nirmala Sitaraman, while presenting the budget on February 1, said that LIC's IPO is going to come before March 31. For this, SEBI has been asked to complete the work of approving the draft of LIC IPO in 3 weeks. Normally SEBI takes months for this work.
LIC IPO Latest Update:
The government today handed over the much awaited draft of LIC IPO to the market regulator SEBI. With this, the long-running speculations came to an end. In this IPO of LIC, the total equity size of the company will be 632 crore shares. About 316 crore shares will be sold in the IPO.
Draft submitted late evening today
The tweeter handle of the Department of Investment and Public Asset Management (DIPAM) secretary was told late on Sunday evening that the draft paper of LIC IPO has been submitted to SEBI. This draft paper is also available on the official website of SEBI. By downloading it from the website of SEBI, one can get the details of the IPO.
More opportunities for policyholders
According to the draft paper of LIC IPO, the size of the total equity is going to be 632 crore shares. The government is going to sell its 5 percent stake through this IPO. At present, the government has 100% stake in LIC. In this IPO, 10 percent share is going to be reserved for the policy holders of LIC. This means that the policy holders of LIC will have more chances of getting a bid in LIC.
Government will sell so many crore shares
The DIPAM secretary told in a separate tweet that through this IPO, the government will sell about 316 crore shares. Out of these, 3.16 crore shares will be reserved for those people who have any LIC policy. He said that this IPO will be purely offer for sale (OFS). There will be no fresh issue of LIC in this.
So much reservation for such investors
As per the IPO draft, 50 per cent of it will be reserved for Qualified Institutional Investors (QIBs). This means that out of the total 31,62,49,885 shares, half i.e. about 15.8 crore shares will be kept aside for QIB. At the same time, 15 percent shares will be kept in reserve for non-institutional investors.
DIPAM secretary gave this information
Tuhin Kant Pandey, Secretary, Department of Investment and Public Asset Management (DIPAM) had recently told that the proposed IPO may also offer discounts to lakhs of LIC insurers. He had said that necessary amendments have been made in the LIC Act to give discount on the issue price to the policyholders. In this IPO, some part can also be kept reserved for the employees of LIC.
Government has high hopes from this IPO
In this financial year, along with disinvestment, the government is lagging behind on the fiscal deficit front. Even after revising the disinvestment target, the government is still miles away. Earlier, a target of raising Rs 1.75 lakh crore from disinvestment was fixed in 2021-22. The government has reduced this to Rs 78 thousand crore. So far, the government has got only about 12 thousand crore rupees from disinvestment. In such a situation, all the hopes of the government rest on LIC IPO to achieve the target.
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