LIC IPO Update: Life Insurance Corporation of India’s IPO will open on May 9, Check Details

The Initial Public Offer (LIC IPO) of the country’s largest insurance company Life Insurance Corporation will open on May 4 and close on May 9. Sources gave this information on Monday. Through the IPO, the government will sell its 3.5 per cent stake in the public sector company. With this, the government will get Rs 21,000 crore. Based on the IPO, the valuation of LIC works out to Rs 6 lakh crore.

The government had planned to sell its five per cent stake or 316 crore shares in LIC in February and also submitted draft papers with SEBI. The government wanted to bring LIC’s IPO in March this year. However, the IPO was postponed in view of the Russia-Ukraine war. Earlier the size of LIC’s IPO was being kept at Rs 60,000 crore, but it has been reduced considering the global market situation.

Last week itself, the government had decided to sell only 3.5 per cent stake instead of 5 per cent. Sources said that the government has also filed an appeal with SEBI for exemption from the rule of selling 5 per cent stake.

As per SEBI rules, companies with valuation of Rs 1 lakh crore or above will have to sell at least 5 per cent stake in the IPO. The embedded value of LIC, which is a way of computing the value of consolidated shareholders in an insurance company, was pegged at around Rs 5.4 lakh crore by international firm Milliman Advisors as of September 30, 2021.

Based on investor feedback, the market value of the government-owned LIC sits at 1.1 times its embedded value or above Rs 6 lakh crore. In the current financial year 2022-23, the government has set a target of Rs 65,000 crore from disinvestment and LIC IPO will go a long way in achieving this target.