LIC's Rs 60,000-crore public offer likely to open on March 11

Sydney/New Delhi, Feb 18

Insurance behemoth LIC’s, set to be the country’s biggest yet at $8 billion, is expected to open for anchor investors on March 11, three sources with direct knowledge of the matter said. The book will open for bidding by other investors a couple of days later, the sources said.

LIC’s initial public offering (IPO) is expected to obtain regulatory approval by the first week of March, after which an indicative marketing price band will be set, said the sources, declining to be named as the deal discussions are private.

India’s biggest IPO

• LIC’s public offering is expected to obtain regulatory approval by the first week of March, after which an indicative marketing price band will be set
• The biggest IPO so far was worth $2.5 billion by Paytm last year
• SBI Caps, Citigroup, Nomura, JPMorgan, Goldman Sachs, along with five others, are book-running lead managers for the deal

LIC declined to comment. A Finance Ministry spokesperson did not immediately respond to a request seeking comment.

The insurer’s IPO will be a test of the depth of capital markets in India, where equity deals worth more than a couple of billion dollars are rare. The biggest IPO so far was worth $2.5 billion by Paytm last year.

LIC’s offering will also sound investor appetite for new equity deals, with a number of Indian companies that listed last year trading below offer prices on concerns over lofty valuations and looming interest rates hikes by central banks.

The sources said the IPO launch schedule could change, though for now the issuer was working to meet those timelines. LIC filed a draft IPO prospectus on Sunday with the market regulator to sell 5% of the Indian government’s stake to potentially raise nearly $8 billion.

The government is rushing to complete the IPO by the end of March to meet its 2021/22 fiscal deficit target of 6.4% of GDP, which is contingent on it raising around Rs 60,000 crore ($8.03 billion) from the issue.

New Delhi sharply trimmed its divestment and privatisation plans for the fiscal year that ends on March 31 to Rs 78,000 crore from 1.75 trillion.

So far, it has raised just Rs 12,000 crore from divesting stakes in state-run companies, including BPCL and two banks. — Reuters

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