LIC IPO Update: Tweak In LIC IPO Size, Valuation

LIC IPO terms are being revised so as to woo investor interest. The LIC IPO size has been reduced substantially from initially Rs. 55000-Rs. 60000 crore to now just at Rs. 21,000 crore with a green shoe option of Rs. 9000 crore as per a Business Standard report.

Through the IPO, the largest public sector insurer coming up with the largest public issue shall dilute as much as 5% stake in the behemoth.

The recent changes also led to the lowering of the company's valuation from Rs. 10-11 lakh crore to Rs. 6 lakh crore, which is 1.1 times the embedded value of Rs 5.4 lakh crore. Embedded value is a measure of the consolidated shareholders' value in an insurance company.

As per the CNBC TV18 report, the centre may take a call to launch it as early as next week and it has time till May 12 to launch the issue without filing fresh documents with the SEBI.

The public issue was planned for March launch but the geo-political crisis led to its deferment. This IPO has been also the part of the centre's FY22 divestment plan. For the year 2022-23, the government has fixed divestment target of Rs. 65000 crore, up from Rs 13,531 crore last fiscal.