LIC files for most-awaited IPO, listing slated for March
State-owned insurance company Life Insurance Corporation (LIC) filed its draft papers with stock regulator SEBI for its IPO on Sunday.
The much talked about LIC IPO is set to hit the capital market in March.
The government will sell over 31 crore equity shares of LIC, according to the draft red herring prospectus (DRHP) filed with SEBI.
“The DRHP of LIC IPO has been filed today with the SEBI,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
The government aims to come out with the IPO and subsequent listing of LIC on bourses by March.
A portion of the IPO would 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.
The IPO can raise between ₹40,000 crore ($5.4 billion) and ₹1 lakh crore this quarter, and its proceeds are essential for the central government to reach a budget-deficit target.
“The size of LIC is breath-taking,” Abhay Agarwal, fund manager at Mumbai-based Piper Serica Advisors Pvt was quoted as saying. While it might be easy for the government to make regulatory amendments needed for the IPO, “it will require significant marketing efforts to cross the ₹50,000 crore line,” he added.
In a recent notice published by LIC on the official website, policyholders have been asked to update their details like PAN number and to create or link their existing Demat account to participate in the IPO.
“The government will also need to learn from its past mistake of pricing public sector IPOs too high,” Piper Serica’s Abhay Agarwal said. “The valuation will have to leave enough on the table for investors to attract them to the IPO.”
(With inputs from agencies)