LIC IPO: Government will benefit, but policyholder bonus will be scissored from IPO

LIC IPO: Now LIC IPO will not be postponed, investors should be ready for big money


new Delhi. There is good news for the investors who have been waiting for LIC’s IPO for a long time. Markets regulator SEBI has approved LIC IPO. That too in just 22 days, which usually takes 75 days. Sources say that SEBI has issued an observation letter for this.

Earlier, SEBI had not approved any IPO so soon. This means that LIC’s IPO is no longer going to be postponed due to the Russia-Ukraine war. That is, due to the Russo-Ukraine war, the government does not want to postpone the IPO to sell its five percent stake, even in the midst of huge volatility in the market. With this, the government can get Rs 60,000 crore.

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The draft was sent to SEBI in February

LIC had filed draft papers with the market regulator in February. According to the draft, it is proposed to sell 31,62,49,885 equity shares out of a total of 632 crore shares of LIC. Of this, 50 percent will be reserved for Qualified Institutional Buyers (QIBs), while it will be 15 percent for non-institutional buyers. 35 per cent may be reserved for retail investors.

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Policyholders will get importance

According to the draft Red Herring Prospectus (DRHP), the issue is likely to have reservations for eligible employees and policyholders of the company. Amidst the ongoing volatility in the market due to the Russo-Ukraine war, there were reports that the government may postpone the LIC IPO till the next financial year in view of the current situation.

valid for 12 months

The approval of the IPO is valid for a period of 12 months from the date of SEBI approval. In the cabinet meeting held recently, a big decision was taken regarding LIC IPO. In this, foreign direct investment (FDI) was allowed up to 20 percent under the automatic route. After this decision, the way for foreign investment has been opened in the proposed IPO of LI.

Tags: central government, LIC IPO, Life Insurance Corporation of India (LIC), SEBI


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