Subscription of an IPO will start from 4th May to 9th May to sell up to 3.5% of its stock in a public offering. They also said that global economic worries have been taken into account, and that market volatility has decreased.
On February 13, the DRHP was filed. The LIC IPO will be the largest ever in the Indian stock market’s history and will be open for subscription from 4 May to 9 May, with a 5% share dilution.
Capital markets regulator SEBI has already given the state-owned insurance giant the green light to raise cash via an initial public offering. The government plans to sell around 31 crore equity shares of LIC, according to a draft red herring prospectus submitted with SEBI, with a part reserved for anchor investors.
Policyholders will be entitled to up to 10% of the IPO issue size, while retail investors will be entitled to up to 35%. The IPO is entirely an offer for sale by the government, and LIC will not issue any new shares. In LIC, the government has 100% ownership or around 632.49 crore shares.
The LIC IPO will be the largest ever in the Indian stock market’s history, with a 3.5% share dilution, and once listed, LIC’s market capitalization would be similar to top businesses like TCS and RIL.
The government plans to raise Rs 21,000 crore by selling a 3.5% interest in the life insurance business to reach a disinvestment goal of Rs 78,000 crore for the current fiscal year. Paytm’s IPO in 2021 garnered the most money to date, at Rs 18,300 crore. With over Rs 15,500 crore, Coal India comes second, followed by Reliance Power with Rs 11,700 crore.
According to the insurer’s website, LIC’s profit after tax jumped to Rs 234.91 crore in the December 2021 quarter. The profit for the nine months ending December 2021 increased to Rs 1,642.78 crore.
Uncertainty about the Russia-Ukraine conflict
Even after 2 months, things haven’t settled down on both sides. Russia and Ukraine are not giving up, and this is affecting the financial markets as a whole. The US and other Western allies are gradually tightening their sanctions. As a result, risk-off sentiment is expected to prevail, putting risky businesses on edge.
Another fiscal deficit on par with previous highs
For the months of April to February, the budget deficit was Rs 13.16 lakh crore, or 82.7 percent more than the revised projection of 6.9%. The government is expected to fulfill its budgetary budget for the second year in a row. In April-September FY23, the government plans to borrow 8.45 trillion rupees, out of a total borrowing target of 14.31 trillion rupees. The Rupee may face a headwind if the budget goal of 6.4 percent is missed.
The beginning of a new fiscal year holds promise for the Rupee, as both local and global circumstances remain fragile and bleak. Flows from US treasuries will undoubtedly continue to throw on and off, ensuring that volatility remains high. On the back of the Fed’s several rises, the DXY is anticipated to continue stronger. The commodities market is undoubtedly in a bull market, which will give gasoline to the current inflationary tsunami.
India, which is a net importer, faces a headwind as a result of higher costs. Payables rise as a result of greater imports, but exports remain uncertain owing to supply disruptions. Overall, the USDINR pair is expected to decline significantly over the next 2 to 4 months, with a target of 77 to 77.50 and 78.50 in the following 6 months. On the downside, support for the pair may be found between 75.50 and 75.20, with additional support around 74.80.
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