LIC to file draft IPO deeds with Sebi next month

NEW DELHI : The country’s largest insurer, LIC, is expected to file draft documents with Sebi by November for the largest IPO in the country’s history, a finance ministry official said.

“We aim to bring the IPO as part of this exercise and we have set strict deadlines. The DRHP would be filed by November,” the official told PTI.

Last month, the government appointed 10 investment bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to handle the mega public offering to the savings from the country’s largest insurer LIC.

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

Once the draft red herring prospectus (DRHP) is filed, investment bankers will hold global and national roadshows for investors by January, the official said.

Cyril Amarchand Mangaldas has been appointed legal counsel for the IPO.

The government aims to list the insurance giant in the current fiscal year ending in March.

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

The government appointed actuarial firm Milliman Advisors LLP India to calculate the intrinsic value of LIC before the initial public offering.

The government is also considering allowing foreign investors to take stakes in the country’s largest insurer, LIC. In accordance with Sebi rules, foreign portfolio investors (REITs) are allowed to buy shares through a public offering. However, since the LIC Law does not contain any provisions regarding foreign investment, it is necessary to align the proposed LIC IPO with the Sebi standards regarding the participation of foreign investors.

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

The listing of PFRs will be crucial for the government to meet its objective of divestment of ??1.75 lakh crore for 2021-22 (April-March).

So far this exercise, ??9,110 crore was absorbed by the sale of minority stakes in PSU and the sale of SUUTI’s stake in Axis Bank.

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