Government is planning to collect funds of 400 billion to 10 lakh rupees through IPO
The Modi government at the Center is struggling as much as possible on every front to reduce the fiscal deficit. Due to this, the government is also trying to reduce its fiscal deficit with LIC’s IPO. Therefore, before bringing the IPO, the Life Insurance Corporation (LIC) is trying to fix the value of the IPO between Rs 8 lakh crore and Rs 10 lakh crore before the central government. The potential value of LIC (LIC Valuation) will be determined after initial negotiation, post-negotiation changes, verification of papers and receipt of official valuation report. It is being said that the government is planning to sell its 5 to 10 per cent stake (government stake sale) in the company.
If the value of LIC is Rs 10 lakh crore, then the government can raise between Rs 400 billion to Rs 1 lakh crore through IPO. It is being said that this IPO will be the biggest IPO of the country till date. The central government wants to reduce the fiscal deficit with the money raised through LIC’s IPO. Earlier, the Center has set a target of raising Rs 1.75 lakh crore through disinvestment this year. The government is also considering FDI in LIC. Last week, some bankers met government and LIC officials to formally discuss the IPO process.
10 merchant bankers have been appointed to manage LIC’s IPO. These include Goldman Sachs (India) Securities, Citigroup Global Markets India and Nomura Financial Advisory & Securities India. According to the Department of Investment and Public Asset Management (DIPAM), select banks working on the IPO include SBI Capital Markets, JP Morgan India, ICICI Securities and Kotak Mahindra Capital Company Ltd.
In the country’s largest IPO, there will be a 10 percent reserve for policyholders. Hence LIC has started the process of allotment in the IPO for the policyholders. The company has started creating a database of suitable policyholders as the company has more than 29 crore policyholders. In her budget speech this year, Finance Minister Nirmala Sitharaman said that in this financial year BPCL, Air India, Shipping Corporation of India, Container Corp of India, IDBI Bank, BEML M, Pawan Hans, Nilachal Ispat Nigam and many other companies will be in the government. plans to sell its stake.