LIC IPO gets SEBI approval: Latest Developments Investors need to know!

Government owned Life Insurance Corporation (LIC) gets SEBI’s nod to raise funds through an initial share sale. The approval from India's market regulator came within 22 days of filing the Draft Red Herring Prospectus (DHRP) by India's largest insurer. The company had filed the draft prospectus on February 12 this year.

With the clearance from SEBI, the government can now launch LIC’s share sale. However, investors may have to wait further to try their luck for owning a stake from the country’s biggest ever IPO. The current global situation, particularly the ongoing Russia-Ukraine crisis have instilled fear in the market, with investors pulling out their wealth every now and then. Read more on LIC IPO (A detailed review)

Delay in LIC IPO launch 

As said, the extremely negative global cues may force the government to postpone the launch of the LIC IPO. Although this is still a speculation, the chances of this happening are high as per experts. The Russia-Ukraine crisis, poor inflation data from the US, Fed tapering, and rising crude oil prices have turned global markets highly volatile. The Indian market has also been bleeding because of all these. The major benchmark indices have lost almost half of the gains made in the last 52 weeks, in which the blue chip stocks have suffered the most.

LIC, after getting listed, will have its market capitalization head-to-head with the top market cap companies like Reliance and TCS. The government may not want to launch the IPO when most investors are showing disinterest in making further investments. This can go against the hype created in the market on the LIC IPO.

LIC IPO Details

As per the draft papers filed by LIC, the government has planned to sell 5% stake in the insurer to raise around Rs 63,000 crores by selling 31.6 crores equity shares. The company’s market valuation is set at Rs 15 lakh crores, which is near to Reliance’s market cap of Rs 15.68 crores.

The company is also planning to to reserve 10% of the IPO issue size for its policyholders and employees.