Govt Likely To Launch LIC IPO By Early May, Considers Seeking Rs 50,000 Crore: Report

New Delhi: The central government is eyeing a mid-May timeline for launching the mega initial public offering (IPO) of Life Insurance Corporation, quoting sources, news agency Bloomberg reported on Tuesday.

According to the report, the government hopes that the volatility in the stock market triggered by the Russia-Ukraine war will subside.

The listing of the LIC is a key part of plans by the Centre, which wants to divest state assets to fund a yawning Budget deficit. The sources have also said that the central government is considering seeking around Rs 50,000 crore next month from the LIC IPO.

According to news reports, the government is discussing selling as much as a 7 per cent stake in the LIC through the listing. It aims to launch the share sale before current approvals for the offering expire on May 12, the sources told Bloomberg.

According to Sebi rules, the LIC’s published embedded value will be valid for the IPO until May. A delay beyond that would mean LIC would have to re-calculate the embedded value, a key valuation gauge for insurance firms, based on the latest financials.

The mega listing of the LIC deferred amid market swings, led by Russia-Ukraine conflict. But this is not the first time. Finance Minister Nirmala Sitharaman in February 2020 first announced the plans for the IPO but was deferred due to the pandemic.

According to the sources, the government and its advisers are considering seeking a valuation of about 1.25 to 1.5 times LIC’s embedded value. Officials are still discussing potential terms of the offering, and the fund-raising target could still change, the people added.