SEBI gives green light for LIC’s mega IPO

K.R. Srivats | Updated on: Mar 09, 2022
Vehicles pass by a bus shelter showing advertisement of country's largest insurer public, Life Insurance Corporation of India (LIC) in Mumbai on February 21, 2022. (Photo by SUJIT JAISWAL / AFP)

Vehicles pass by a bus shelter showing advertisement of country's largest insurer public, Life Insurance Corporation of India (LIC) in Mumbai on February 21, 2022. (Photo by SUJIT JAISWAL / AFP) | Photo Credit: SUJIT JAISWAL

Market regulator issues observation letter on Tuesday

Market regulator SEBI has given a go-ahead for state-owned Life Insurance Corporation’s mega initial public offering (IPO), which is slated to be the biggest ever in India’s capital market history. The government is looking to sell over 31 crore shares in the offer for sale and mobilise atleast ₹ 65,000 crore through the mega IPO. The government holds a 100 per cent stake --632.49 crore shares at face value of ₹ 10 each and is looking to shed a 5 per cent stake through this offering.

The final observation letter from SEBI was issued on Tuesday, sources close to the development said. SEBI has only made minor observations on the over 600 pages DRHP, which was filed on February 13..

This SEBI approval would mean that government can now take the crucial decision of deciding the timing and pricing of the offering, they added. 

There is still no indication of the launch date of the IPO. The government is likely to weigh in the implications of the current volatile market conditions due to the ongoing Russia-Ukraine war before taking a call on the timing.

Once listed, LIC’s market capitalisation would be comparable to the top companies like RIL and TCS.

In the run up to the IPO, actuarial firm Milliman Advisors LLP had pegged the embedded value of LIC at ₹ 5.4 lakh crore. The government is likely to peg the enterprise valuation at 2-3 times the EV worked out for LIC.

Published on March 09, 2022
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