'We have filed our draft red herring prospectus for a floating IPO for a net offer size of 86.6 million shares.'
The Securities and Exchange Board of India (Sebi) has cleared the draft red herring prospectus (DRHP) of the state-owned Life Insurance Corporation of India (LIC). According to investment banking sources, the so-called final observations were issued by the market regulator on Tuesday evening. Following the market regulator's nod to the IPO papers, the insurer can launch its share sale. However, LIC may not launch its IPO immediately given the current volatile market conditions.
RailTel Corporation of India, Indigo Paints, Home First Finance Company, Indian Railway Finance Corporation, and Suryoday Small Finance Bank are among the companies looking to tap the market.
The government is likely to file draft papers for the mega initial public offering of LIC with market regulator Sebi by next week, while a portion of the issue would be reserved for anchor investors, a top official said on Wednesday.
Through anchor allotment, a firm can demonstrate the demand for shares by getting marquee investors on board.
The primary market is set for a bumper Rs 80,000-crore bonanza with 30 companies already filing IPO papers to raise Rs 55,000 crore, while around 10 more are lined up for this month itself, seeking to mop up another Rs 25,000 crore, say investment bankers. The market has been on a non-stop rally, hitting new records almost every week, on the back of an influx of investors -- a vast majority of them first-timers -- coupled with a flood of liquidity. Foreign funds alone had pumped in a record $35 billion into the market in FY21, while the trend has continued this fiscal as well. Domestic institutions led by LIC have also infused trillions of rupees, helping woo retail investors in troves -- the year saw over 20 million new investors coming to the market.
Since the beginning of 2020, i-bankers have collected nearly Rs 1,800 crore by way of IPO fees. Interestingly, the India fees this year form just 1 per cent of the global fee pool of $13.7 billion from IPOs.
A host of companies have been lined up by the disinvestment department as candidates for stake sale.
Ajit Mishra, vice president, research, Religare Broking, answers your stockmarket queries.
'The target for next year is unlikely to be more than that of this year. The more you divest in any cycle, the less your potential pipeline for the next,' said an official. 'The first two issues we want to tackle and complete in FY20 are Air India and Hotel Ashok.'
In a bid to resurrect Air India privatisation, the government is planning to give flexibility to potential investors to decide on the humongous debt with the national carrier, a top official has said. The flexibility to potential investors on the quantum of the Rs 60,074 crore debt that they want to absorb will replace the current condition of the buyer taking over more than a third of the debt and transferring the rest to a special purpose vehicle, Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey said.
Ajit Mishra, vice president, Research, Religare Broking, answers your queries.
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