LIC IPO: Government plans to raise about Rs30,000 crore, half of earlier estimate

22 Apr , 2022 By : Kanchan Joshi

The government is planning to raise about Rs30,000 crore, half of what it had earlier estimated, from selling a just over 5% stake in insurance behemoth Life Insurance Corporation of India (LIC) via initial public offering (IPO), as per a report by Reuters. Despite the halving of the government's fundraising goal, it would still be India's biggest IPO to date.

While the LIC IPO was planned for March, the volatility in the Indian stock market amid the escalating Russia-Ukraine crisis prompted the Centre to postpone it to April-end or early-May. The government is likely to take a call on the timing of the mega share sale this week, as per reports.

The government has time till May 12 to launch the IPO without filing fresh papers with the market regulator Securities and Exchange Board of India (SEBI).

The LIC IPO will be the largest such offering to hit the Indian stock markets and is expected to help the government achieve its disinvestment target of Rs65,000 crore for FY23. As of 19 April, the government has collected Rs3,026 crore from the offer-for-sale of Oil and Natural Gas Corp. Ltd.

LIC's first-year premium collection, a key metric, rose 7.9% to Rs1.98 trillion for the year ended 31 March, data reviewed showed, boosting the prospects of the state-run insurer as the government gets ready to brave choppy markets to take the company public.

India’s largest insurer ended last fiscal with a market share of 63.25%, lower than the previous year. However, in March, the company’s premium collections grew 51% to Rs42,319.22 crore from a year earlier, garnering a market share of 71%, the data showed.

The country’s largest insurance provider sold 21.7 million insurance policies in the year ended 31 March, 3.54% more than the previous fiscal, according to the data, boosting its market share to 74.6% in terms of policies sold.