LIC date of IPO valuation price DRHP

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The intrinsic value will help establish the market valuation of LIC and determine how much money the government will raise in the IPO.

LIC’s market valuation has been projected at around four times intrinsic value. (Representative image by Reuters)

As the government prepares to file a draft Red Herring (DRHP) prospectus for LIC’s initial public offering (IPO), all eyes are on the valuation of the public insurer’s mega stock sale.

LIC IPO VALUATION

The intrinsic value of LIC has been finalized at more than 5 trillion rupees ($66.82 billion), said a government official who oversees what is expected to be the country’s biggest IPO.

“I would say the intrinsic value could be over Rs 5 trillion and the enterprise value will be a multiple of that,” the secretary of the Department of Investment and Public Assets Management told Reuters. (DIPAM), Tuhin Kanta Pandey.

The intrinsic value will help establish the market valuation of LIC and determine how much money the government will raise in the IPO. This will be crucial for the government to meet its divestment targets and bring its budget deficit under control.

LIC’s market valuation has been projected at around four times intrinsic value.

LIC IPO SIZE

Prime Minister Narendra Modi’s government cut its divestment target to 780 billion rupees ($10.43 billion) in the year ending March, from a previously budgeted target of 1.75 trillion rupees. He is banking on the IPO of LIC to achieve his revised target.

It has so far raised about 120 billion rupees by selling stakes in other companies. Selling 5% of LIC shares to earn that amount might be ideal, but the government was also prepared to sell up to 10%, government and banking sources said.

Pandey, however, declined to disclose the size of the stake the government would sell in the first round.

LIC IPO DATE

The government is likely to file draft documents for LIC’s mega initial public offering with market regulator Sebi by next week, while part of the issuance would be reserved for anchor investors, Pandey said. , according to the PTI report.

The show, after Sebi’s approval, is expected to hit the market in March, PTI reported.

READ ALSO | LIC IPO: Details of India’s largest public offering

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