With an aim to put back cash in the public coffers which lost a lot of money due to the pandemic, India is planning one of the biggest IPO listings ever, as per The Quint.?
February 13 saw filed its draft red herring prospectus with SEBI. The filing states that the government is offering Rs 31.62 crore equity shares which is a 5% stake in the IPO.
The government has a 100% stake in the company.?
Retail investors have responded positively to the IPOs launched in the past year. Having said that, one must be clear about the temperature around the LIC IPO listing.?
The Indian economy has taken a big hit due to COVID and during this point in time, the benefits for the government are obvious.?
"The government needs the proceeds of disinvestment to fund the infrastructure projects and other expenses that have built up due to the costs of the pandemic," said Monika Halan who is an author and the adjunct professor at the National Institute of Securities Markets.
"The Indian stock market needs this IPO to provide breadth and depth. India has a problem of few large-scale firms and, therefore, fewer stocks that can absorb the investments, both Indian and foreign, that are flowing," she added.?
"Depending on the shares on offer, this would give the government a handsome amount as divestment proceeds," said Niraj Shah who is the Markets Editor at BloombergQuint.?
All the proceedings are going straight to the government. The government has a divestment target of Rs 78,000 crore in this year's Union Budget.?
The sale's promoter is the President of India who is acting through the Ministry of Finance.
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