Financial Insights

LIC:-THE Biggest IPO Giant Seeks Exemption From SEBI.

LIC is India’s only government-owned insurance provider company. It is the largest company in the Indian insurance space with a market share of above 64.1% in terms of premiums and 66.2% market share in terms of New Business Premium.

The wait for LIC Ipo is going to be over soon. LIC has started its proceedings for their upcoming IPO.This will be the biggest IPO in Indian history.Since amount has not been disclosed yet but analysts believe that it may range between 50000-90000 crore IPO.

The bigger the issue size the bigger will be the deposit money. As per SEBI Regulation, Company opting for IPO has to deposit 1% of Issue SIZE as a security deposit for countering any type of fraud. This amount is returned to the issuer after the share scale.

Since the amount is big ,LIC seeks exemption from SEBI for their deposit amount.

The promoter of LIC is the President OF INDIA. Since it is purely under government regulation, chances of fraud are negligible, believes LIC.

On 28th January SEBI already granted exemption to LIC  regarding furnishing of financial statements of subsidiaries while filing consolidation Financial Information.

LIC has also asked Sebi for an exemption on disclosing the “consolidated number of creditors,” it said in the offer document. Sebi is yet to give its decision on this.

So much exemption for a company who is option for largest IPO in Indian history is not acceptable.Sebi should consider public Interest before allowing any exemption.

ABHISHEK KUMAR(Research Analyst

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