LIC 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 reports, the government will run a special campaign for policy buyers.
What is the government’s planning?
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.
As per the existing SEBI rules, promoters cannot reduce their stake to less than 20 percent 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 percent in two years. 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 may come by the end of the current financial year 2021-22. In addition, Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
SEBI has changed some rules
In order to ease the way for LIC 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 percent public shareholding in 2 years and 25 percent in 5 years.
Finance Minister Nirmala Sitharaman had said that after 5 years of IPO, the government will have a 75 percent stake in LIC, which will be brought down to 51 percent later.