LIC to file draft IPO papers with Sebi by November, says FinMin official

Country’s largest insurer LIC is likely to file draft papers with Sebi by November for the largest IPO in country’s history, a finance ministry official has said.

“We target to bring the IPO within this fiscal and we have set strict timelines. The DRHP would be filed by November,” the official told PTI.

The government last month appointed 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd to manage the mega initial public offering of country’s largest insurer LIC.

Other selected bankers include SBI Capital Market Ltd, JM Financial Ltd, Axis Capital Ltd, BofA Securities, J P Morgan India Pvt Ltd, ICICI Securities Ltd, and Kotak Mahindra Capital Co Ltd.

Once the draft red herring prospectus (DRHP) is filed, merchant bankers will hold global and domestic road shows for investors by January, the official said.

Cyril Amarchand Mangaldas has been appointed as legal advisor for the IPO.

The government is aiming to list the insurance behemoth within the current financial year ending March.

The ministry is in the process of estimating the embedded value of the life insurer and once that is done the ministerial panel on disinvestment will decide on the government stake that will be divested through IPO, the official said.

The government has appointed actuarial firm Milliman Advisors LLP India to compute the embedded value of LIC ahead of the initial public offering.

The government is also mulling allowing foreign investors to pick up stakes in country’s largest insurer LIC. As per Sebi rules, foreign portfolio investors (FPIs) are permitted to buy shares in a public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.

The Cabinet Committee on Economic Affairs had in July cleared the initial public offering proposal of Life Insurance Corp of India.

The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March).

So far this fiscal, Rs 9,110 crore has been mopped up through minority stake sales in PSU and sale of SUUTI stake in Axis Bank.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor