Govt to seek Rs.50,000 cr next month from LIC IPO: Report

The union government is seeking around Rs. 50,000 crore next month from the IPO of state-owned insurance giant Life Insurance Corp. (LIC), Sources reported on Tuesday.

The government is discussing selling as much as a 7% stake in LIC through the listing, the report noted. At 7% stake sale, the LIC IPO would be biggest ever in the history of Indian stock market and once listed LIC's market valuation would be comparable to top companies like RIL and TCS.

So far, the amount mobilised from IPO of Paytm in 2021 was the largest ever at Rs.18,300 crore, followed by Coal India (2010) at nearly Rs.15,500 crore and Reliance Power (2008) at Rs.11,700 crore.

According to the DRHP, the plan was to sell about 31.6 crore shares or 5% stake, which is estimated to fetch around Rs. 60,000 crore to the exchequer.

The government has time till 12 May to launch the IPOwithout filing fresh papers with market regulator Sebi.

Keeping an eye on that, the government is aiming to launch the share sale before current approvals for the offering expire.

The government and its advisers are considering seeking a valuation of about 1.25 to 1.5 times LIC's embedded value. Officials are still discussing potential terms of the offering, and the fund-raising target could still change.

The listing forms a key part of plans by Prime Minister Narendra Modi's administration to divest state assets to fund a yawning budget deficit.