LIC board okays cut in IPO issue size to 3.5%

NEW DELHI: The board of Life Insurance Corporation of India on Saturday trimmed the size of the state-owned insurer’s initial public offering (IPO) to 3.5% from 5% earlier at an estimated valuation of ₹6 lakh crore, two people aware of the development said. The share sale will be launched in the first week of May, they said.

The issue size of the IPO has been revised to a minimum of 3.5% from the earlier 5% based on current market situation and feedback from experts, the people said, asking not to be named. The minimum value of the issue size would be around ₹21,000 crore.

“The company will seek fresh regulatory approval because of the change in the offer size and announce details of the IPO such as the issue price, dates, reservations, and discounts by Wednesday,” one of the people said.

Email queries sent to LIC and the finance ministry elicited no response.

The government, which fully owns the country’s largest insurer, is taking a cautious approach in the light of the ongoing war in Ukraine, which has adversely impacted market sentiment. The draft red herring prospectus (DRHP) filed on March 13 had envisaged an IPO of 5% of the shares.

The launch of LIC’s IPO at this juncture would add to the confidence of investors as India is the world’s fastest growing economy, the second person said. “The government may further dilute its equity stake in the company through follow-on public offerings, or other routes, depending on the market situation, as there is no desperation for raising money immediately,” he said.

THE SHARE SALE WILL BE LAUNCHED IN MAY, PEOPLE FAMILIAR WITH THE MATTER SAID. MINIMUM VALUE OF THE ISSUE SIZE WILL BE AROUND ₹21,000 CRORE