Financial Insights

Bankers suggest govt. to postpone as LIC IPO gets SEBI’s approval

Indian market regulator, Securities Exchange Board of India (SEBI) has granted its approval for the bumper IPO of Life Insurance Corporation (LIC). This could be one of the fastest approvals in SEBI history, SEBI approved the IPO of LIC within a mere 22 days of filing. For the sake of comparison, Zomato’s IPO was approved after over 2 months.

It is expected that the government, which holds 100% in the insurance behemoth, will sell 5% of its stake in the company through the IPO. 50% of the offer will be reserved for QIBs, 15% for HNIs and 35% for RIIs. The IPO is said to be worth over Rs 60,000 crores, the final valuation for which will be decided near the launch of IPO. 10 investment banks are managing the IPO.

However, the IPO may be deferred on account of the volatility in the market due to the Russia-Ukraine war. Stock indices have fallen over 9% as the war raged on and the market has been extremely volatile ever since. The bankers have advised the government not to rush the offer to launch it when the market conditions are extremely volatile and investment appetite is low. This IPO is the country’s biggest IPO ever and rushing to launch it out might spell doom. The IPO approval is valid for 12 months as per SEBI regulations.

Highlight by Aman Agarwal.

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