LIC IPO Soon, Suggest New Government Forex Law Notification: 5 Points

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Top 5 takeaways from LIC’s IPO history so far

To allow large foreign portfolio investors (REITs) to subscribe to shares in the public listing of insurance giant, Life Insurance Corporation (LIC), the government amended the rules of the Foreign Exchange Management Act (FEMA ).

Here’s Your 5-Point Guide to LIC’s Delayed IPO History

  1. FEMA’s notification is required to operationalize the already approved and revised foreign direct investment (FDI) policy to facilitate the 20% foreign investment in the mega initial public offering (IPO).

  2. This FEMA rule change notification suggests the insurance giant’s delayed public offering could likely arrive soon, with reports suggesting a late April or early May listing. The government has until May 12 to launch LIC’s IPO without filing new documents for approval with the Securities and Exchange Board of India (SEBI).

  3. SEBI approved the LIC’s IPO documents and the government expected to raise over ₹60,000 crore by selling around 31.6 crore or 5% stake in the life insurance company to reach the l divestment target reduced by ₹78,000 crore in 2021-22.

  4. Although the government may consider little more than selling the 5% stake in LIC’s IPO, it is unlikely to significantly reduce its stake in LIC for at least 2 years after listing. insurers, as such a move could affect the returns of investors participating in the mega IPO.

  5. Even with a 5% stake sale, LIC’s IPO would be the largest in Indian stock market history. Once listed, LIC’s market valuation would be comparable to that of leading companies such as Reliance India Limited (RIL) and Tata Consultancy Services (TCS).

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