LIC IPO: Officials of the Life Insurance Corporation (LIC) of India, in one of its talks with global investors on the premises of its upcoming IPO, have indicated that the insurance company is likely to file its draft prospectus with market regulator Sebi by the third week of January, as per reports. This comes as the government has time and again confirmed that the LIC IPO will be floated before the end of fiscal 2022, and that that the work is on course. The Centre has also refuted claims that the IPO will be floated any later than the specified time.
Here are key things we know about the LIC IPO so far:
a) The LIC IPO is expected to get its draft papers filed with the Sebi by the third week of January, according to a report by the Times of India. This is in line with the government’s claims to float the IPO by the end of the 2022 fiscal. Officials also told global investors that the LIC is increasing its focus on ULIPs, pension, annuity and health insurance products, said the report quoting sources. They said that the company also plans to recruit more young people, to keep up with the changing demographic.
b) In another Times of India report, the media organisation said that LIC IPO will not be valued as much as it is being anticipated. The government is likely to set a price more conservative than our expectations, according to some analysts quoted by the Times of India. While the valuation of the LIC IPO will be in several lakh crore, it will be in single digits, according to the report. However, this will not take away its title of being the most valuable public offer in the country. The IPO will be helpful for the government to meet its disinvestment target of FY22.
c) LIC shares will be provided at a discount to policyholders, the company has said. It has also urged policyholders to open a demat account and link Aadhaar with LIC in order to buy shares during the public offer — a part of which will be set aside exclusively for them. In a notification dated December 2, the insurance company said, “In order to participate in any such public offering policyholders will need to ensure that their PAN details are updated in the corporations records. Further, subscribing to any public offering in India is possible if you have a valid demat account. Accordingly policyholders must ensure that they have a valid demat account in place.”
d) The government has shortlisted Cyril Amarchand Mangaldas as a legal advisor on upcoming mega IPO of LIC. Apart from the legal advisor, the government has appointed 10 top global and Indian merchant banks to manage the initial public offer of Life Insurance Corporation (LIC) of India. It has also selected Concept Communications as the advertising agency and Kfintech as the registrar and share transfer agent for the IPO. The Department of Investment and Public Asset Management said in a that it has appointed Goldman Sachs, JP Morgan, Citigroup, Nomura, Bank of America Securities, JM Financial, SBI Caps, Kotak Mahindra Capital, ICICI Securities and Axis Capital to manage the IPO.
e) The central government has refuted claims around the LIC IPO. The Centre, last month, dismissed media speculations claiming that the government is unlikely to come up with the LIC IPO in the current financial year ending March 2022. The Secretary of Department of Investment and Public Asset Management in a tweet said that the plan is on course, and said that the reports were not correct.
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