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Government looks up to split LIC IPO into 2 offerings August 13 2021LIC IPO , lic ipo date, LIC IPO opening date

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The government is planning to split the proposed initial public offering (IPO) of life insurance powerhouse LIC, through which it plans to raise approximately Rs 1 lakh crore, into two consecutive offerings separated by a few months because it is believed that the market may not be able to absorb the entire issue in one go.

If this idea works as planned, it will be the first of its sort. According to existing SEBI guidelines, promoters cannot reduce their ownership to less than 20% within 18 months after an IPO. It further states that the promoter of a huge firm with a market value of Rs 1 lakh crore can take up to two years to reduce his or her stake to 10%.

Cornerstone investors, prominent asset managers who may put in substantial sums ahead of the IPO, which is projected to be the largest in the country's history, are among the alternatives being discussed for LIC.

It is worth noting that government-owned enterprises do not engage in any sort of pre-IPO share placement with investors, including selling to cornerstone investors, pre-IPO placement to large institutions, or selling a portion of the IPO to anchor investors a day before the issue opens.

Authorities participating in the IPO process anticipate that with so many offers already closed and several more in the queue until the LIC offer hits the market, a considerable portion of investors' funds will have already been consumed.

It should be highlighted that over 25 IPOs had raised approximately Rs 70,000 crore in 2021. Paytm, a tech-enabled money transfer company, has also filed for an IPO of Rs 16,600 crore. This would make the Paytm IPO the largest in India. The largest IPO until now has been Coal India's Rs 15,475-crore IPO in 2010.

 “All alternatives are on the table (to make the LIC offer a success),” an official close to LIC transactions said.

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