homemarket NewsCentre woos global sovereign, pension funds as anchor investors for LIC IPO, says report

Centre woos global sovereign, pension funds as anchor investors for LIC IPO, says report

By CNBCTV18.com Apr 16, 2022 4:56:37 PM IST (Updated)

The government has sounded out global sovereign wealth funds and pension funds such as Abu Dhabi Investment Authority, Singapore-based GIC, three Canadian pension funds and Qatar Investment Authority on being anchor investors for the public issue.

For the initial public offering (IPO) of the Life Insurance Corporation (LIC), the government has sounded out global sovereign wealth funds and pension funds such as Abu Dhabi Investment Authority, Singapore-based GIC, three Canadian pension funds and Qatar Investment Authority on being anchor investors for the public issue, a media report said.

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Although, these funds have shown interest, the government wants to reaffirm their participation in the LIC IPO, Economic Times reported.
“Many leading sovereign funds have expressed interest in the LIC IPO. Merchant bankers are in advanced discussions with them for being anchor investors in the issue,” Economic Times quoted an official as saying.
As these funds are stable investors with a long-term horizon, the government, LIC’s parent, is keen on their participation, the official said.
A strong list of anchor investors also boosts the confidence of the retail and other institutional investors and can create more demand for the IPO.
Though discussions are on, these investors have not committed to the quantum of the investment they were likely to make in the IPO till now. That confirmation will come only when the government nears a final issue price and communicates it to them, the official said.
“The process is on and we will do it soon," the official told Economic Times without giving a timeline.
During the roadshows, the government reached out to about 180 potential anchor investors. According to officials, the LIC IPO, which is set to be the biggest ever Indian public offer, will require at least 8-10 big-ticket foreign investors.
Meanwhile, the Centre has shortlisted 50-60 anchor investors and will finalise its anchor book for the public listing soon, Business Standard reported. BlackRock, Fidelity Investments, Sands Capital, Standard Life, and JP Morgan feature in the list of shortlisted candidates, the report said.
The government may raise Rs 60,000-70,000 crore by selling a 5 percent stake in LIC at an estimated embedded value of Rs 5.4 lakh crore. Of this, the anchor investment portion is likely to be about Rs 18,000 crore.
 
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