Insurance regulator (IRDAI) has approved LIC’s IPO proposal, sources told CNBC-TV18. The LIC DRHP filing with SEBI is now likely to occur on February 11, 2022. The number of divestments and embedded value must be stated in DRHP.
The government plans to keep some of the IPO for LIC policyholders, who can also get discounts as the government wants to bring in a larger share of private investors. Likewise, the government is in the process of adopting a 20 percent foreign investment limit in LIC to attract foreign investors to make the IPO a huge success. The IPO is expected to hit the market in mid-March.
Actuary Milliman Advisors LLP India has worked out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors. Under the embedded value method, the present value of the future profits of insurance companies is also included in their present net asset value (NAV).
The government has 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 manage the mega-IPO of the country’s largest insurer.
LIC’s highly anticipated IPO is expected to be the largest the country has ever witnessed. LIC’s IPO could help the government meet its revised divestment target of Rs 78,000 crore, down from the original target of Rs 1.75 lakh crore. So far this fiscal year, the government has managed to raise Rs 12,000 crore from divestment receipts.
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