A SEBI rule may create problems for LIC, which is preparing for an initial public offering (IPO). Under this rule, Life Insurance Corporation of India (LIC) may have to sell another 20 per cent stake within three years of its listing on the stock exchange. LIC’s IPO may come on March 11.
According to the rules of the Securities and Exchange Board of India (SEBI), any company listed on the stock exchange has to reserve 25 per cent of its stake for the general public within three years. Analysts say that LIC is selling only five per cent of its stake through the IPO.
This means that the country’s largest insurer may have to sell another 20 per cent stake in the next three years. Thus, it will have to sell an average of about 42 crore shares every year. Its total cost can be around Rs 2.5 lakh crore.
Some questions that need answers
- Analysts say that if LIC follows this rule of SEBI, then will the market be able to handle the supply of such a huge number of shares.
- If this does not happen, then the government will make a special for LIC and exempt it from the rule of reserving 25 percent stake for the general public.
- What will be the role of market regulator SEBI in this matter. The situation regarding these questions is not clear yet.
will become the third largest companyThe market capitalization of LIC will see a huge jump once it is listed on the stock exchange. It will become the third largest company by market capitalization after Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS). 60,000 to 90,000 crore is expected to be raised from this IPO.
Insurance company alone will raise half the amount
- Last year, various companies raised a record Rs 1.20 lakh crore through IPOs. LIC alone is going to raise half of this amount by selling five per cent stake in its IPO. This shows the strength of LIC in the Indian market.
- In this IPO, it is being said to reserve about 35 percent of the shares i.e. 11 crore shares for retail investors.
- As of October 2021, only 73 million people had demat accounts in India. Therefore, it also has to be seen how much the reserved part can be filled.
Investors should not worry about government control: ChairmanLIC Chairman MR Kumar said investors need not worry about the government’s control over the company after the IPO. The company has sufficient capital. He doesn’t need the money now. If we need it, we will take help not only from the government but from all the stakeholders. He said that in the country’s largest insurance company, the decision is not taken by the government but by its board.
Even after the IPO, the government’s stake in the company will remain 95 per cent. A SEBI rule may create problems for LIC, which is preparing for an initial public offering (IPO). Under this rule, Life Insurance Corporation of India (LIC) may have to sell another 20 per cent stake within three years of its listing on the stock exchange. LIC’s IPO may come on March 11.
According to the rules of the Securities and Exchange Board of India (SEBI), any company listed on the stock exchange has to reserve 25 per cent of its stake for the general public within three years. Analysts say that LIC is selling only five per cent of its stake through the IPO. This means that the country’s largest insurer may have to sell another 20 per cent stake in the next three years. Thus, it will have to sell an average of about 42 crore shares every year. Its total cost can be around Rs 2.5 lakh crore.
Some questions that need answers
- Analysts say that if LIC follows this rule of SEBI, then will the market be able to handle the supply of such a huge number of shares.
- If this does not happen, then the government will make a special for LIC and exempt it from the rule of reserving 25 percent stake for the general public.
- What will be the role of market regulator SEBI in this matter. The situation regarding these questions is not clear yet.
will become the third largest companyThe market capitalization of LIC will see a huge jump once it is listed on the stock exchange. It will become the third largest company by market capitalization after Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS). 60,000 to 90,000 crore is expected to be raised from this IPO.
Insurance company alone will raise half the amount
Last year, various companies raised a record Rs 1.20 lakh crore through IPOs. LIC alone is going to raise half of this amount by selling five per cent stake in its IPO. This shows the strength of LIC in the Indian market.
- In this IPO, it is being said to reserve about 35 percent of the shares i.e. 11 crore shares for retail investors.
- As of October 2021, only 73 million people had demat accounts in India. Therefore, it also has to be seen how much the reserved part can be filled.
Investors should not worry about government control: Chairman
LIC Chairman MR Kumar said investors need not worry about the government’s control over the company after the IPO. The company has sufficient capital. He doesn’t need the money now. If we need it, we will take help not only from the government but from all the stakeholders. He said that in the country’s largest insurance company, the decision is not taken by the government but by its board. Even after the IPO, the government’s stake in the company will remain 95 per cent.
A SEBI rule may create problems for LIC, which is preparing for an initial public offering (IPO). Under this rule, Life Insurance Corporation of India (LIC) may have to sell another 20 per cent stake within three years of its listing on the stock exchange. LIC’s IPO may come on March 11.
According to the rules of the Securities and Exchange Board of India (SEBI), any company listed on the stock exchange has to reserve 25 per cent of its stake for the general public within three years. Analysts say that LIC is selling only five per cent of its stake through the IPO.
This means that the country’s largest insurer may have to sell another 20 per cent stake in the next three years. Thus, it will have to sell an average of about 42 crore shares every year. Its total cost can be around Rs 2.5 lakh crore.
Some questions that need answers
- Analysts say that if LIC follows this rule of SEBI, then will the market be able to handle the supply of such a huge number of shares.
- If this does not happen, then the government will make a special for LIC and exempt it from the rule of reserving 25 percent stake for the general public.
- What will be the role of market regulator SEBI in this matter. The situation regarding these questions is not clear yet.
will become the third largest companyThe market capitalization of LIC will see a huge jump once it is listed on the stock exchange. It will become the third largest company by market capitalization after Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS). 60,000 to 90,000 crore is expected to be raised from this IPO.
Insurance company alone will raise half the amount
- Last year, various companies raised a record Rs 1.20 lakh crore through IPOs. LIC alone is going to raise half of this amount by selling five per cent stake in its IPO. This shows the strength of LIC in the Indian market.
- In this IPO, it is being said to reserve about 35 percent of the shares i.e. 11 crore shares for retail investors.
- As of October 2021, only 73 million people had demat accounts in India. Therefore, it also has to be seen how much the reserved part can be filled.
Investors should not worry about government control: ChairmanLIC Chairman MR Kumar said investors need not worry about the government’s control over the company after the IPO. The company has sufficient capital. He doesn’t need the money now. If we need it, we will take help not only from the government but from all the stakeholders. He said that in the country’s largest insurance company, the decision is not taken by the government but by its board.
Even after the IPO, the government’s stake in the company will remain 95 per cent. A SEBI rule may create problems for LIC, which is preparing for an initial public offering (IPO). Under this rule, Life Insurance Corporation of India (LIC) may have to sell another 20 per cent stake within three years of its listing on the stock exchange. LIC’s IPO may come on March 11.
According to the rules of the Securities and Exchange Board of India (SEBI), any company listed on the stock exchange has to reserve 25 per cent of its stake for the general public within three years. Analysts say that LIC is selling only five per cent of its stake through the IPO. This means that the country’s largest insurer may have to sell another 20 per cent stake in the next three years. Thus, it will have to sell an average of about 42 crore shares every year. Its total cost can be around Rs 2.5 lakh crore.
Some questions that need answers
- Analysts say that if LIC follows this rule of SEBI, then will the market be able to handle the supply of such a huge number of shares.
- If this does not happen, then the government will make a special for LIC and exempt it from the rule of reserving 25 percent stake for the general public.
- What will be the role of market regulator SEBI in this matter. The situation regarding these questions is not clear yet.
will become the third largest companyThe market capitalization of LIC will see a huge jump once it is listed on the stock exchange. It will become the third largest company by market capitalization after Reliance Industries Limited (RIL) and Tata Consultancy Services (TCS). 60,000 to 90,000 crore is expected to be raised from this IPO.
Insurance company alone will raise half the amount
Last year, various companies raised a record Rs 1.20 lakh crore through IPOs. LIC alone is going to raise half of this amount by selling five per cent stake in its IPO. This shows the strength of LIC in the Indian market.
- In this IPO, it is being said to reserve about 35 percent of the shares i.e. 11 crore shares for retail investors.
- As of October 2021, only 73 million people had demat accounts in India. Therefore, it also has to be seen how much the reserved part can be filled.
Investors should not worry about government control: Chairman
LIC Chairman MR Kumar said investors need not worry about the government’s control over the company after the IPO. The company has sufficient capital. He doesn’t need the money now. If we need it, we will take help not only from the government but from all the stakeholders. He said that in the country’s largest insurance company, the decision is not taken by the government but by its board. Even after the IPO, the government’s stake in the company will remain 95 per cent.