What does government need to do to make the LIC IPO issue a major success?

LIC is going to be a mega issue and five times the size of the largest issue till date. Coal India in 2010 was a Rs.15,000 crore IPO and LIC is likely to be closer to Rs.75,000. Most likely, the QIBs will be expected to play a bigger role and may get 75% allocation with 10% for retail. A huge anchor placement and pre-IPO placement also looks a strong possibility. LIC may also count heavily on its customers and agents to make the issue a big success.

However, the government must find a way to answer some uncomfortable questions to the institutions. For example, LIC has lost 32% of the market to private players in the last 20 years. Secondly, LIC has been funding a lot of government projects and has a problem with a spike in debt NPAs. The government may also have to explains why NBP for LIC has fallen in last 2 months while all private players are seeing a rise in new business premiums.