LIC IPO: LIC’s IPO to be launched on May 4, government will sell 3.5 percent stake

Lic Ipo

Image Credit source: Representative Photo

Last month, the Madras High Court dismissed a petition challenging the Finance Bill and changes made in the LIC Act to sell the government’s stake in public insurance company LIC.

The country’s largest insurance company Life Insurance Corporation (Life Insurance Corporation, IPO of (IPO) will open on May 4 and will close on May 9. Sources gave this information on Monday. Through the IPO, the government will sell its 3.5 percent stake in the public sector company. With this, the government will get Rs 21,000 crore. Based on the IPO, the valuation of LIC comes to Rs.6 lakh crore. Last month the Madras High Court (Madras High Court) has dismissed the petition challenging the changes made in the Finance Bill and the LIC Act to sell the government’s stake in the public insurance company LIC.

Dismissing a PIL filed by L Ponnammal, a bench of Chief Justice MN Bhandari and Justice D Bharat Chakraborty said that there was no unconstitutionality in the amendments made in the LIC Act through Money Bill. The bench said that there is nothing constitutionally wrong in amending the LIC Act through a money bill to bring about an initial public issue of Life Insurance Corporation of India.

‘Approval given by the Speaker of Lok Sabha cannot be challenged’

At the same time, LIC’s policyholder Ponnammal had said in his petition that the money bill was adopted in a wrong way to amend the Act for the sale of government stake in LIC. He had said that changes were made in the rules by bringing a money bill under Article 110 of the Constitution, although it does not come in the definition of money bill itself. The bench, in its decision, said that the approval given by the Speaker of the Lok Sabha to introduce the bill brought in this regard as a money bill cannot be challenged.

He said that the decision of the Lok Sabha Speaker in this matter would be final. The central government is preparing to bring an IPO to sell some of its stake in LIC. For this, it has also presented a draft related to the IPO before the market regulator SEBI. The government expects to raise more than Rs 60,000 crore from this stake sale. LIC made a net profit of Rs 235 crore in the October-December quarter. Between April and December 2021, the net profit increased to Rs 1,671.57 crore.

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An official said that we have time till May 12 to bring the IPO based on the documents filed with SEBI. We are monitoring the volatility and will soon file the RHP along with the price range. Also said that if the government is not able to bring the IPO by May 12, then it will have to file new papers with SEBI, stating the results of the December quarter.

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