The country's largest-ever Initial Public Offering (IPO) of state-run insurance behemoth LIC is expected to begin on May 4. According to reports, the objective is to raise Rs 21,000 crore by diluting a 3.5 per cent interest.
The most anticipated offering is expected to open for anchor investors on May 2, while the entire issue is scheduled to finish on May 9. According to sources, the dates will be publicly revealed on Wednesday morning or Tuesday late evening. Given the rough market conditions, the government has decided to reduce the tax rate to 3.5 per cent from the previously scheduled 5 per cent. It is larger than the Paytm IPO of Rs 16,600 crore, as per reported by Times Of India.
The government has agreed to a lower value of Rs 6 lakh core to guarantee that the shares appeal to individual investors while still leaving some money on the table for listing advantages. Previously, the market projected the government to sell Rs 12 lakh crore shares, valuing the organisation.
Officials have defended the valuation, claiming that it is reasonable and appealing based on comprehensive feedback from analysts and specialists. They further stated that in China, firms similar to LIC are trading at a multiple of 1.1 times their embedded value (EV), while LIC's valuation is 1.1 times its EV at Rs 6 lakh crore. The net asset value plus the present value of coming earnings is the EV (embedded value), a metric used to value life enterprises, as reported by Times Of India.
Critics Of LIC IPO
The critics for and against LIC IPO are spreading like wildfire. Thomas Isaac from, Member, Central Committee of Communist Party of India (Marxist) has asked why the Indian government is trying to sell LIC at any price?
Given the importance of the insurance behemoth in the lives of residents, there has been a lot of interest in LIC's IPO. LIC has been undertaking a campaign to encourage individual investors who have not previously invested in the capital markets to create Demat accounts to take advantage of the reservation and discount.
The campaign's results have been good, with a 34 lakh increase in the number of Demat accounts. The government has been working on numerous fronts to secure a solid response to the country's most extensive initial public offering (IPO).
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