A senior official has said that the government is likely to take a call on the timing of LIC initial public offering within this week.
New Delhi: The government is planning to dilute its stake in LIC through the the Initial Public Offering (IPO). LIC in February had filed the Draft Red Herring Prospectus (DRHP) before the markets regulator Sebi for the IPO. The sale of 5 percent stake or 31.6 crore shares in the country’s largest insurer was originally planned for in March, but was postponed in view of the geopolitical tension.
However, a senior official has told news Agency PTI that the government is likely to take a call on the timing of LIC initial public offering within this week.
The government has time till May 12 to launch the LIC IPO without filing fresh papers with markets regulator Sebi. If the IPO is not launched now then it would have to be deferred till August or September since fresh papers with updated quarterly results and valuations would have to be filed with Sebi.
If the government decides to go ahead with the initial public offering by May 12 then the life insurer will have to file the red herring prospectus with Sebi by next week.
The official also said that under the present market condition the government is unlikely to offload more than 5 per cent stake in the life insurance behemoth.When we are already facing headwinds, we cannot test waters with higher IPO size.
The official said it would be a tough call to decide whether to go ahead with the retail and domestic investor demand or to wait for geopolitical tension to ease and FIIs to return to market, reported PTI. The news ageny also reported that its e-mail seeking comments for the story did not elicit any response.
LIC IPO would contribute a major chunk to the budgeted disinvestment proceeds in the current fiscal year. The government has pegged disinvestment receipts at Rs 65,000 crore for 2022-23, up from Rs 13,531 crore last fiscal year.
With PTI Inputs
