IPO IPO: Life Insurance Corporation of India (LIC) has submitted an updated DRHP for LIC IPO to SEBI. Updated DRHP for LIC IPO is based on LIC’s December financial numbers, a government official told CNBC-TV18. On March 11, 2022, state-run insurer LIC said its after-tax taxable profit rose to Rs 234.91 crore in the third quarter, from just Rs 0.91 crore in the same quarter of the previous year, mainly due to a change in the redistribution of funds. policy.
On February 13, the government submitted the draft Red Herring Prospectus (DRHP) for the IPO to Sebi, which approved it last week. The government will sell about 31.6 crore shares or a 5 percent stake in the insurance giant, which is estimated to bring about Rs 60,000 crore to the treasury. The public issue was originally supposed to be launched in March, but the crisis between Russia and Ukraine has derailed the plans.
LIC IPO: Details on Price Range, Discount Percentage
This will provide details on the price range, discount for policyholders and private buyers, and the actual number of shares that will be placed in the block, an official told PTI.
“We have the approval of the DRHP and the next step would be to file the RHP which will provide details on the price range and actual number of shares. We are monitoring the situation and will call shortly about the timing of the share sale,” an official told the news agency.
LIC IPO: Reserved Portions
According to the DRHP, the issue will likely be reserved for eligible employees and LIC policyholders of the company. One third of the anchor portion is reserved for domestic mutual funds.
The issuance would be a sale offer of 31,62,49,885 shares by the government, which has a 100 percent stake in the insurance giant. In total, 50 percent of the net issuance would be reserved for qualified institutional buyers (QIBs), while non-institutional buyers will receive 15 percent of the shares for them. The retail area is set at 35 percent of the supply.
LIC IPO: Embedded Value
The embedded value of LIC, which is a measure of consolidated shareholder value in an insurance company, was set at approximately Rs 5.4 lakh crore on September 30, 2021 by the international actuarial firm Milliman Advisors. While the DRHP does not disclose the market value of LIC, by industry standards it would be approximately 3 times the embedded value.
At a sale of 5 percent of its shares, LIC’s IPO would be the largest ever in the history of the Indian stock market, and once listed, LIC’s market valuation would be comparable to top companies such as RIL and TCS. So far, the amount mobilized from Paytm’s IPO in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.
Read all the latest news, breaking news and the war between Ukraine and Russia here.
