LIC-Life Insurance Corporation of India IPO: Big news has come about the IPO of the country’s largest insurance company LIC. To benefit those who buy the policy, the government has made a new plan.
Big news has come about the IPO of LIC-Life Insurance Corporation of India. There has been a lot of interest among Book Running Lead Managers (BRLMs) for LIC IPO. 16 big companies of the country have applied for this. On the other hand, the government has made a new plan to increase retail participation (small investors) in IPO. According to media reports, the policy will run a special campaign for the buyers.
What is the government’s preparation
According to the news published in Business Standard, the government has made a new plan regarding LIC’s IPO. A special campaign will be run for this. So that, policy buyers can get information about it. At the same time, there is a preparation to open more and more demat accounts through IDBI Bank. For this, the campaign will start soon. Through this the government is planning to raise Rs 1 lakh crore.
Earlier there was news that investors are eagerly waiting for the IPO of LIC. It is believed that this issue can come in two installments.
It was told in the news of the English newspaper Times of India that there would be a gap of a few months between the two installments. The reason for this is believed to be that the market is not in a position to handle such a huge issue. If this plan is implemented, then this will be the first time in the country that an issue will come in two installments.
As per the existing SEBI rules, promoters cannot reduce their stake to less than 20 per cent within 18 months of the IPO. Also, promoters of a large company with a market cap of Rs 1 lakh crore can reduce their stake by 10 per cent in two years.
In the monsoon session of Parliament, the government has said that LIC can set a separate quota for customers in its IPO. 10% of the issue size can be reserved for policyholders.
LIC’s IPO can come by the end of the current financial year 2021-22 i.e. by 31 March 2021. In addition, Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
Changed rules
In order to ease the way for LIC’s IPO, SEBI has changed some of the IPO rules in recent times.
SEBI said in February that if the market cap of a company reaches Rs 1 lakh crore after the IPO, it can reach the level of 10 per cent public shareholding in 2 years and 25 per cent in 5 years.
Finance Minister Nirmala Sitharaman had said that after 5 years of IPO, the government will have 75 percent stake in LIC, which will be brought down to 51 percent later.
