LIC IPO size might reduce to ₹30,000 crore

One of the biggest Insurance Companies in India, Life Insurance Corporation is said to reduce its initial public offering (IPO) size and does not want to risk all due to valuation concerns amid the ongoing Russia-Ukraine conflict. According to the Bloomberg report, The LIC IPO is estimated to be cut down by 40% to ₹30,000 crore from earlier estimates of around ₹60,000 crore. Previously, LIC IPO was supposed to be listed on the Indian bourses by March 2022 for the government to achieve the divestment target. However, the unexpected Russia-Ukraine conflict triggered one of the biggest market crashes, which eventually affected the commodity markets and triggered inflation.

This forced the government to postpone the IPO. According to the original Draft Red Herring Prospectus (DRHP), the government is planning to sell 31 crore equity shares or 5% stake in the company through the IPO.  LIC’s DRHP was filed by the government in the month of February and reportedly they have time till May 12 to launch the LIC Initial Public Offering without filing fresh papers with the market regulator Securities and Exchange Board of India (SEBI). If the LIC IPO is not launched within the date then the government will have to file an updated DRHP with the latest December quarter earnings.