LIC board approves reduction in IPO issue size to 3.5%: Sources

Life Insurance Corporation of India's board at its meeting held today has approved to reduce in the size of the state-owned firm's initial public offering (IPO), sources said. The government will now dilute 3.5 per cent of its shares in LIC, subject to regulatory approval. This would value LIC at Rs 6 lakh crore. The issue size is expected to be worth Rs 21,000 crore.

"LIC IPO is likely to come to the market in May first week," sources said. Reservations, discounts, issue dates and issue price will be known by Wednesday morning, they added. 

Earlier government estimates had called for the insurer to be valued at around Rs 17 lakh crore.

The government had initially wanted to list LIC in the last financial year that ended March 31 but had to delay the sale after Russia's invasion of Ukraine triggered a market rout.

The 66-year-old company dominates India's insurance sector with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.

Investors have been concerned that LIC's investment decisions, including those in loss-making state companies, could be influenced by government demands.

(With inputs from Karishma Asoodani)