Mumbai. The government is planning to raise Rs 25,000 crore in LIC’s IPO through a group of anchor investors. Two people associated with the matter, including a top government official, gave this information. Sources said that the country’s largest insurer has also asked to change the structure of its board. Along with this, new accounting rules will also be adopted.
There can be more than two dozen anchor investors
According to sources, anchor investors will be invited after the embedded valuation exercise and the IPO price is finalised. According to another source, there can be more than two dozen anchor investors in LIC’s IPO.
Anchor investors are essentially brought in to enhance investor confidence and gauge the demand for IPOs in the market. Anchor investors can be important to the company due to the size of LIC and new changes. IPO investors may be worried about the company’s growth due to its size.Also read- In this scheme of Post Office, deposit only Rs 95 and you will get 14 lakhs, know how?
A mere 10% stake in the company is estimated to be worth at least ₹1 trillion, which is unconventionally high for the Indian equity market.
50% shares of IPO can be offered to QIB
As per SEBI regulations, anchor investors are QIBs (qualified institutional buyers) who agree to buy shares of the company at a particular price by applying for an investment of at least ₹10 crore before the opening of the IPO. 50% of the shares of the IPO can be offered to the QIB. Out of this, up to 60% can be allocated to anchor investors. Of this, one-third is reserved for mutual funds.
Also read- Start this powerful profitable business, will earn up to 9 lakhs, the government will also help
IPO may come by March 2022
According to a report, the government may send an invitation for the sale of LIC shares in the coming weeks. LIC’s IPO may come by March 2022. It is believed to be the biggest IPO of the country till date. LIC’s IPO was announced by Finance Minister Nirmala Sitharaman while presenting the Union Budget for the financial year 2020-21.
According to the latest annual report of LIC, in the financial year 2019-20, the total estimated assets of LIC are around Rs 32 lakh crore i.e. $ 439 billion. LIC’s share in the country’s life insurance market is about 69 percent. According to sources, discussions are going on about the listing plan of LIC and it may still change. A representative of the Finance Ministry declined to comment in this regard.