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April 6, 2022

Indian government eyes $6.6bn IPO for LIC in May

The Indian government is looking to raise nearly $6.6bn from the initial public offering (IPO) of Life Insurance Corporation of India (LIC) in May this year, Bloomberg reported citing sources.

The authorities are also considering increasing the stake they plan to sell in the life insurer to up to 7%, the sources said, adding that they aim to launch the IPO before current approvals expire on 12 May.

A final decision on the terms of the offering is yet to be made and the target for the IPO could still change, they added.

“Merchant bankers have been talking to investors. A final call will be taken based on the interest shown by pension funds, sovereign funds and other investors and the anchor book prepared by the bankers,” an official was quoted by Mint as saying.

LIC’s IPO will play a crucial role in filling the gap between the Indian government’s budget deficit.

Initially, the government had planned to list the life insurer before 31 March 2022, but the plan was put on hold in the wake of the global turmoil caused by the Russian invasion of Ukraine.

“Volatility has reduced to some extent, and we also have the outer window of 12 May, and discussions with investors should materialize before that,” the official told the Mint.

In early March Securities and Exchange Board of India (SEBI) approved LIC’s IPO, which is an offer for sale and the government will not issue any new shares.

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