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Business News/ Markets / Ipo/  LIC IPO: Govt files DRHP with SEBI; to sell 5% stake in India's biggest insurer

India's biggest state-owned insurer Life Insurance Corporation (LIC), in its prospectus filed with market regulator SEBI, has said the net IPO (initial public offering) offer will constitute 4.99 per cent of the company's post-offer paid-up share capital. 

The IPO issue is expected to be the country's largest public issue and will hit the capital market in March. As per the draft prospectus filed on February 13, LIC will offload 316.25 million shares (over 31 crore). As per DRHP, LIC has said as of September 2021, its assets under management (AUM) stood at 39.6 lakh crore.

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the IPO is 100 per cent OFS by the government of India, and that no fresh issue of shares will be made by LIC. “For filing valuation about 31.6 cr shares are on offer representing 5% equity," he said.

The insurance giant has a whopping 66 per cent market share in new business premiums, with 283 million policies and 1.35 million agents as of 31st March 21. The embedded value of LIC as of September 30, 2021, stood at 5,39,686 cr (about 5.4 lakh crore), the DIPAM Secretary said.

The government plans to come out with the IPO, and the subsequent listing of Life Insurance Corporation (LIC) on bourses by March. A portion of the IPO will be reserved for anchor investors. 

Also, up to 10 per cent of the LIC IPO issue size would be reserved for policyholders. Actuarial firm Milliman Advisors LLP India had worked out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors. 

LIC’s profit had risen to 14.4 billion ( 144 crore or $191 million) in the six months to September; from 61.4 million during the same period last year, As per the global news agency Bloomberg.

The IPO will be managed by Kotak Mahindra, Citi Bank, Axis Bank, Nomura, Bofa Securities, Goldman Sachs, ICICI Securities, JM Financial and JP Morgan.


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Updated: 13 Feb 2022, 09:23 PM IST
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