Congress leader Jairam Ramesh questions govt over 'lower' price of LIC shares ahead of mega IPO

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Ahead of the mega LIC IPO, Congress leader Jairam Ramesh asked on Friday why the Narendra Modi government fixed a "lower" price for shares of the public sector insurance company.

The government is selling over 22.13 crore shares in LIC at a price band of Rs 902-949 apiece in the initial public offering, which opens on May 4 and closes on May 9.

In a tweet, former union minister Ramesh said, "Big stock market players are salivating at prospect of a jackpot in grey market after reduced price of LIC offering. This market long dormant has revived in anticipation of LIC IPO. All this is known to Modi Govt. Lower price works for optics of oversubscription but at what cost?"

"Very intriguing that while filing the prospectus in February for its mega IPO, LIC disinvestment was at 2.5 times the embedded value, but now the valuation of the IPO to open soon is just 1.1 times. Why is the Modi Govt so desperate to sell and sell cheap?" he said in an earlier tweet.

LIC shares would start trading on stock exchanges on May 17.

The government expects to raise around Rs 21,000 crore from LIC IPO, which values the state-owned insurer at Rs 6 lakh crore.

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