Big update on LIC IPO, Government to reduce its valuation

There is important news for the people waiting for LIC IPO. The volatility in the Indian market is also visible due to the sell-off and volatility in the global market due to the Russia-Ukraine war. In such a situation, the government is planning to cut the valuation of LIC IPO. It is being told that the government can reduce its valuation by about 30 percent. The government can take this decision to attract investors in the environment of a downturn in the market.

The government wants to keep the valuation of LIC around Rs 11 lakh crore, whereas earlier the valuation of Rs 16 lakh crore was planned. Despite the cut in valuation, it will prove to be the biggest IPO in the country. The government had not made all the preparations to bring the IPO in March 2022 but it was postponed due to the market environment.

LIC had recently filed draft papers with the market regulator in February. According to this draft, it is proposed to sell 31,62,49,885 equity shares out of a total of 632 crore shares of LIC. Of this, 50 percent will be reserved for Qualified Institutional Buyers (QIBs), while it will be 15 percent for non-institutional buyers.

Once LIC IPO is approved by SEBI, this IPO is valid for a period of 12 months from the date of approval. In the cabinet meeting, a big decision was taken regarding LIC IPO. In this, Foreign Direct Investment (FDIE) was allowed up to 20 percent under the automatic route. After this decision, the way for foreign investment has been opened in the proposed IPO of LI. But, in view of the declining environment of the market, foreign investors have started withdrawing their money from the market.