LIC files papers with SEBI for mega IPO, Govt to sell 5 pc stake

New Delhi: Public sector insurance behemoth Life Insurance Corporation (LIC) has filed the draft red herring prospectus (DRHP) with market regulator SEBI setting the stage for mega initial public offering (IPO).

LIC will be listed on bourses by March-end. "The DRHP of LIC IPO has been filed today with the SEBI," announced Department of Investment and Public Asset Management (DIPAM) Secretary on Twitter.

He said that the proposed IPO is 100% OFS (offer for sale) by Government of India and not fresh issue of shares by LIC. As per the draft prospectus, LIC will offload 316.25 million shares of face value Rs 10 each representing 5% equity stake.

While a part of the shares would be reserved for anchor investors, upto 10 per cent of the offer size is earmarked for eligible LIC policyholders. DIPAM said that LIC has 66 per cent market share in New Business Premiums with 283 million policies and 1.35 million agents as of 31st March 21.

“Embedded value of LIC as on 30th Sep 21 is Rs 5,39,686 cr (about INR 5.4 trillion)," DIPAM Secretary tweeted. In its objects of the offer, the draft prospectus said that the move is aimed at achieving the benefits of listing on the stock exchanges and carry out the Offer for Sale (OFS) of upto 316,249,885 equity shares by the government.

As per the DRHP, LIC's asset under management (AUM) stood at Rs 39.6 lakh crore as of September, 2021. The LIC IPO is set to help the government meet its disinvestment target which has been revised downward to Rs 78,000 crore from Rs 1.75 lakh crore projected earlier for financial year 2021-22.

It is also expected to give major push to government's disinvestment programme. Privatisation of Air India has already sent a strong message among investors about the government's intention to speed up reforms. (UNI)