SEBI approves LIC's updated DRHP for IPO

The Securities and Exchange Board of India on Monday approved LIC's updated draft red herring prospectus (DRHP) for the Initial Public Offering (IPO), people in the know of the matter said. But experts say that since the IPO is not expected in this fiscal year, the DRHP will need to be updated again.

State-owned Life Insurance Corporation (LIC) had filed an updated DRHP for the IPO with the Securities and Exchange Board of India (SEBI), a government official told CNBC-TV18. The updated DRHP for the IPO is based on LIC's December financials, the official said.

Earlier this month, LIC received SEBI's go-ahead to raise funds through an initial share sale. The IPO launch was originally planned for March, but the Russia-Ukraine crisis derailed the plans as stock markets have been highly volatile. It has been reported that the LIC is likely to issue its IPO in April.

These Indian IPOs may have been delayed due to Russia-Ukraine war

Earlier this month, an official said the government had time till May 12 to launch the LIC IPO without filing fresh papers with market regulator SEBI. The government is closely watching the market volatility, due to the Russia-Ukraine war, and investor interest will be the key deciding factor for the timing of India's biggest IPO.

LIC had filed its IPO papers with SEBI in February.  As per the DRHP for the IPO in February, LIC's offer is entirely an offer for sale (OFS) of 316,249,885 shares by the shareholder, President of India, acting through the Ministry of Finance, Government of India. This means the government will sell 5 percent stake via the IPO.

The government owns 100 percent in LIC, whose total equity is around 632 crore shares. The government, while targeting Rs 1.75 trillion receipts for this year, had expected completion of big-ticket privatisation proposals. The target was slashed to ₹78,000 crore. The government’s sale of about 31.6 crore shares or 5 per cent stake in LIC was estimated to fetch around Rs 60,000 crore to the exchequer.