LIC's IPO may be delayed: RBI said to Sebi, 'It is very important to bring IPO at the right time'
Ankur | Mar 22, 2022 |
LIC’s IPO may be delayed: RBI said to Sebi, ‘It is very important to bring IPO at the right time’
A fresh draft of IPO (DRHP) has been submitted by LIC to the market regulator SEBI regarding IPO. According to media reports, LIC has deposited DRHP afresh on the basis of December quarter results.
According to the approval given to the old DRHP, LIC can bring IPO by May 12. But now LIC will be able to bring an IPO even after May 12, if the DRHP is renewed.
Earlier on February 13, DRHP was submitted for LIC IPO. There is a lot of volatility in the stock market at this time.
In such a situation, the government wants to wait so that the IPO gets a bumper success. The government does not want to take any kind of risk in this matter.
LIC’s net profit has increased to 234.9 crore in the December quarter. The company’s net profit in December 2020 was only 90 lakhs.
First year premium increased to Rs.8748.55 crore from Rs.7957.37 crore in December 2020 quarter.
Renewal premium increased to Rs.56822 crore. Total premium for the December quarter stood at Rs.97761 crore as against Rs.97008 crore a year ago.
Regarding LIC IPO, RBI said that it will be the biggest IPO in the history of India. So it is very important to bring it at the right time. 35% reservation has been given for retail investors in LIC IPO.
In such a situation, the response of the retail segment is very important.
RBI said that the participation of retail investors in the stock market has increased significantly in the current financial year. Between April 1, 2021 and January 2022, a total of 289 lakh i.e. 2.89 crore new demat accounts have been opened.
The Union Cabinet recently revised the FDI policy to allow foreign investors to participate in this IPO. Foreign investment in LIC’s IPO via the automated route is now permitted up to 20% under this amendment.
As per DRHP, 10% share will be reserved for LIC policy holders under the reservation portion. Maybe they can get a discount of 5% in the share price.
LIC’s issue will be the biggest IPO ever in the Indian stock market. After listing, the market valuation of LIC will be at par with top companies like RIL and TCS.
Prior to this, Paytm’s issue was the biggest and the company had raised Rs.18,300 crore from IPO last year.
This IPO is expected to raise around Rs.65,000 crore.
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