IPO News

Government plans to increase LIC’s authorized capital to Rs 25,000 crore

The government has recently advanced to hike the authorised capital of Life Insurance Corporation of India to Rs 25,000 crore. Moreover, the aim is to facilitate its listing slated for the next fiscal.

At present, the paid-up capital of the life insurance company with more than 29 crore policies is Rs 100 crore.

Further, LIC has an asset base of Rs 31.96 lakh crore with an initial capital of Rs 5 crore back in 1956.

As per the amendments proposed in the LIC Act, 1956, it’s authorized share capital will amount to Rs 25,000 crore. This will comprise 2,500 crore shares of Rs 10 each reportedly.

The amendments will also result in setting up of a board with independent directors in sync with listing obligations.

However, the government will own 75 percent stake in LIC for the first five years post the IPO.

Subsequently, it will also hold at least 51 percent stake at all times after five years of the listing.

Besides this, it will reserve LIC IPO issue size up to 10 percent for policyholders as per reports.

Meanwhile, Finance Minister confirmed the launch of initial public offering of LIC in the next financial year, starting April 1.

Moving forward, the Centre holds about 100 percent stake in LIC.

It plans to become the country’s biggest company via market capitalisation with an estimated valuation of Rs 8-10 lakh crore.

Currently, Deloitte and SBI Caps are the pre-IPO transaction advisors.

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