Up to 10 per cent of the LIC IPO issue size would be reserved for policyholders
The government has already brought in required legislative amendments in the LIC Act for the proposed IPO
The Union Cabinet has cleared disinvestment of the country's largest insurer LIC and a panel headed by the finance minister will now decide on the quantum of stake dilution, a senior official said on Monday.
The Department of Investment and Public Asset Management (DIPAM) had in January appointed actuarial firm Milliman Advisors LLP India to assess the embedded value of LIC ahead of the IPO (Initial Public Offering), which is touted to be the biggest public issue in Indian corporate history.
The Budget amendments to the LIC Act has been notified and the actuarial firm is expected to finalise the embedded value of the life insurer. Under the embedded value method, the insurance company's present value of future profit is also included in its present net asset value.
"The Cabinet Committee for Economic Affairs last week cleared the proposal of initial public offering of LIC. The alternative mechanism on disinvestment will now decide on the quantum of stake to be divested by government," the official said.
The government expects to come out with the LIC IPO by the end of current fiscal, the official added.
Up to 10 per cent of the LIC IPO issue size would be reserved for policyholders.
The government has already brought in required legislative amendments in the LIC Act for the proposed IPO.
Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
The listing of LIC will be crucial for the government to meet its disinvestment target. The government aims to mop up ₹1.75 lakh crore in the current fiscal from minority stake sale and privatisation.
Of the ₹1.75 lakh crore, ₹1 lakh crore is to come from selling government's stakes in public sector banks and financial institutions. The remaining ₹75,000 crore would come as CPSE disinvestment receipts.
In her Budget speech in February this year, Finance Minister Nirmala Sitharaman said the IPO of LIC would be floated in 2021-22.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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