Government to file DRHP for LIC IPO in the coming week

• ByTejika Bajaj     |    February 3, 2022

Following the announcement of LIC’s (Life Insurance Corporation) public listing in the union budget 2022, the government has taken upon its word and is all set to file the DRHP (draft red herring prospectus) of LIC within the coming week. While the estimated amounts of funds that will be raised remain undisclosed, sources have revealed that an offer of at least 5% of the stake will be made through the IPO.

Though the estimated shares to be listed are still undecided, sources close to the development have revealed that the DRHP will specify a minimum quantum of 5% of the shares which will be up for sale. The exact size and number of shares will be decided later.

The government is aiming to list the country’s largest life insurer by March, which will be crucial to meet its revised target of Rs 78,000 crore from disinvestments. The embedded value of the state-run insurer is likely at $150 billion around Rs 11 trillion. 

On being asked whether the government would prefer to dilute equity through multiple tranches, Tuhin Kanta Pandey, secretary of the department of investment and public asset management (DIPAM) said, “The number of tranches will depend on us because it is a very complicated issue of when once can go for a new FPO because the size is very large, the number of shares is also very large, and it is depending upon that we have to decide how much we will be able to come out (in the first tranche).”

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