SEBI, the market regulator, has accepted the central government’s application for the LIC IPO. Life Insurance Corporation is expected to sell 5 percent of its shares. There will be a discount of 10 percent given to policyholders in LIC’s initial public offering. However, the record date will be February 13, and the PAN card policy will be updated by February 28.
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Policyholders are allowed a maximum of Rs 2 lakh. LIC India’s IPO has a share size of 31,62,49,885, with a retail quota of 35 percent. LIC’s IPO has been in the making for some time, and in order to make it a reality, the government has also sought advice from specialist companies.
As reported by sources, LIC’s board of directors approved the IPO. If SEBI approves LIC’s IPO, it could take place within a few days. The IPO may hit the capital market in March, according to sources. The government plans to sell about 31 crore equity shares in the draft it filed with SEBI.
Tuhin Kanta Pandey, Director, Department of Investments and Public Asset Management (DIPAM), tweeted that the DRHP for LIC’s IPO had been submitted to SEBI. Life Insurance Corporation (LIC) is expected to be listed on the stock exchanges by March. Anchor investors will receive a portion of the IPO. LIC’s IPO issue will reserve up to 10 percent for policyholders.
According to the source, preparations have been completed, and the DRHP could be filed as soon as next week. An IPO by LIC is important for the government amidst an estimated shortfall of Rs 78 thousand crores in government disinvestment targets for the current fiscal year. So far, the government has raised around Rs 12,000 crore by privatizing Air India and selling its stakes in other PSUs. LIC held a 64.1% share of the domestic market in 2020. LIC ranks third in the world when it comes to life insurance premiums, according to Crisil.
Prior to 2000, LIC’s market share was 100 percent, but in 2016, it had decreased to 71.8 percent. LIC’s market share further declined to 64.1% in 2020. SBI Life’s market share in 2016 was just 5%, and its share in 2020 is projected to be 8%.