listing of LIC Set to become India’s biggest ever IPO, government aims to raise Rs. 900 billion ($12.24 billion) from its stake sale.
The move will help ease the process for the company to raise funds for a possible IPO by the government in the current financial year. Given the concerns over the Indian stock market’s ability to absorb an offering of such a size, investors expect the IPO to be offered in two parts.
Last month, the government had shortlisted 10 merchant bankers, including giants like Goldman Sachs, ICICI Securities and JP Morgan Chase, to manage the IPO. In addition, the government has invited bids from legal advisors as well as public relations bodies.
The government in the Union Budget for 2020-21 had stated its intention to sell a minority stake in the country’s largest life insurer. The government is counting on raising close to Rs. 1 lakh crore from the public offering, which will be a major part of its disinvestment target. 1.75 lakh crore for the current financial year.
LIC’s assets increased to Rs. The 38 lakh crore mark in the last financial year helped the domestic equity market move strongly. In 2020-21, the life insurer has paid Rs. 1.8 lakh crore in new business premium, showing a growth of 3.5 per cent.