Sebi Approves Lic’s Drhp Update for IPO

The Securities and Exchange Board of India on Monday approved LIC’s updated draft red herring prospectus (DRHP) for initial public offering (IPO), people familiar with the matter said. But experts say that since the IPO is not expected in this fiscal year, the DRHP will again have to be updated.
The state-owned life insurance company (LIC) had filed an updated DRHP for the IPO with the Securities and Exchange Board of India (SEBI), a government official told CNBC-TV18. The updated DRHP for the IPO is based on LIC’s December financials, the official said.
Earlier this month, LIC received the green light from SEBI to raise funds through an initial sale of shares. The launch of the IPO was originally scheduled for March, but the Russian-Ukrainian crisis derailed plans as stock markets have been highly volatile. It has been reported that LIC will likely release its IPO in April.

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Earlier this month, an official said the government had until May 12 to launch the IPO of the LIC without filing new documents with market regulator SEBI. The government is watching market volatility closely, due to the Russian-Ukrainian war, and investor interest will be the main deciding factor for the timing of India’s biggest IPO.
LIC had filed its IPO documents with SEBI in February. According to the DRHP for the IPO in February, the LIC offer is entirely an offer for sale (OFS) of 316,249,885 shares by the shareholder, the President of India, acting through the Ministry of Indian Government Finance. This means that the government will sell 5% of the capital through the IPO.

The government owns 100% of LIC, whose total capital is about 632 crore shares. The government, while targeting Rs 1.75 trillion in revenue for this year, expected the completion of costly privatization proposals. The target was reduced to ₹78,000 crore. The government’s sale of around 31.6 crore shares or 5% stake in LIC was estimated at around Rs 60,000 crore to the Treasury.


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