In CY22, LIC's US$ 2.7 billion initial public offering (IPO) will be the fifth-largest in the world. LG Energy Solution, a South Korean electric vehicle battery manufacturer, holds the record for the year's largest IPO at US$ 10.8 billion, while China Mobile IPO, which garnered US$ 8.6 billion, comes in second.
The US$ 6.1 billion IPO of Dubai Electricity and Water Authority (DEWA) in March is currently the third largest public offering of the year, followed by the IPO of the China National Offshore Oil Corporation (CNOOC), which raised US$ 5.1 billion by issuing shares in Mainland China after delisting from American exchanges.
The LIC IPO comes at a time when global deal flow has stalled. The number of initial public offerings (IPOs) worldwide fell by about 40% YoY in the first quarter of 2022, with volumes virtually halving to US$ 54 billion. With the exception of DEWA and LIC, most of this year's top agreements were announced last year. Given the slowing economy, LIC's ten investment banks have taken a cautious approach, reducing the deal size from an estimated Rs. 60,000 crore (US$ 8 billion) to Rs. 21,000 crore (US$ 2.7 billion).
According to experts, LIC's previous IPO size would have put the depth of India's capital market to the test. They claim that because the IPO size has been reduced, there will be lesser test of appetite. "Despite the volatility of the markets, there is enough liquidity in the Indian markets for a large issuance like LIC to receive sufficient subscribers," said Mr. Venkatraghavan S, Equirus' MD and head of equity capital markets.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.