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Center aims to raise Rs 21,000 crore with LIC IPO that opens 4 May

A Life Insurance Corporation building in Kolkata, India
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New Delhi: The long-awaited initial public offering (IPO) of the Life Insurance Corporation of India (LIC) will open between 4 and 9 May.

India’s biggest public issue will be in the price band of Rs 902-949 per share for Rs 21,000 crore.

There will be has Rs 60 discount to policyholders and a Rs 45 discount for retail investors and employees, according to reports.

The life insurance behemoth is hundred per cent owned by the government. In February, the Center had planned to disinvest a 5 per cent stake in LIC to replenish its coffers.

However, the ongoing market volatility due to the Russia-Ukraine war made it lower the IPO size to 3.5 per cent. At this price, LIC is valued at Rs 6 lakh crore.

Department of Investment and Public Asset (DIPAM) Secretary Tuhin Kanta Pandey said the IPO was right sized, “given the constraints in the market”. The IPO would not “crowd out capital and monetary supply in the market”, he added.

DIPAM deals with all matters relating to the management of central government investments in equity, including disinvestment of equity in public sector undertakings.

Secretary Pandey said the government wanted “LIC as the long term value creator in the equity market”. “LIC was always an investor and now LIC is coming before investors to get invested in.”

LIC’s embedded value, which is a measure of the consolidated shareholders value in an insurance company, was pegged at Rs 5.4 lakh crore as of 30 September, 2021 by international actuarial firm Milliman Advisors.

LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current financial year. The government has pegged disinvestment receipts at Rs 65,000 crore in the current fiscal, up from Rs 13,531 crore raised in the last year, news agency PTI reported.


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