LIC IPO gets Sebi approval; may see delayed launch over Ukraine crisis

India’s markets regulator has approved the public listing of Life Insurance Corporation of India (LIC), sources told 'Business Standard' on Wednesday as the war in Ukraine casts a shadow over the state-owned firm’s IPO timing.

The government is looking to sell a 5 per cent stake, or 316 million shares, in the insurer through the IPO. Investment banking sources said Sebi issued the so-called final observations on Tuesday evening.

LIC's IPO is one of the fastest to get Sebi approval; the insurer had filed its DRHP on February 12. Once a DRHP obtains final approval, the company can launch its share sale.

However, LIC may not launch its IPO immediately given the volatile market conditions. Investment bankers said they would want to wait till the market sentiment improves.

Benchmark indices have come off 9 per cent this year amid a surge in global oil prices following Russia's attack on Ukraine. The government is planning to divest 316.2 million shares, 5 per cent stake, in IPO.

The government, which holds 100 per cent stake in LIC, was looking mop up between Rs 60,000 crore and Rs 75,000 crore in the IPO. This would peg LIC's value between Rs 12 trillion and Rs 15 trillion.

The final valuation will be decided closer to the IPO.

The mega offering is coming at a time when foreign portfolio investors (FPIs) have hit an exit button. They have pulled out over Rs 1 trillion from domestic stocks so far this year.

The IPO will test the appetite and depth of the domestic market as it is by far the largest share sale seen in the history of Indian markets.

The previous biggest IPO of Paytm worth Rs 18,300 crore had bombed with shares crashing more than 60 per cent.

LIC, which is a household name in the country thanks to its over 250 million policy holders, has created significant buzz among retail investors already.

The LIC share sale is being handled by 10 investment banks led by Kotak Mahindra Bank and Axis Capital.