Life Insurance Corporation (LIC) Chairman MR Kumar on Monday said he is monitoring the market as the company looks to list in March. Addressing the media, ahead of the issue launch, Kumar said that the IPO is getting a lot of traction from the policyholders.
He assured potential investors that they need not worry about the massive bad loans as the company has done a lot of clean-up for the IPO.
Kumar has also said that investors should not worry about government control after the IPO as decisions in the country’s largest insurance company are taken by its board and not by the government, which holds 95% stake after the IPO. Will be
Speaking on the profitability of LIC, Kumar said, the metrics or profits of insurance companies are different from others.
“Our surplus was more than 50,000 crore, but 95% of it was going to the policyholders. Going forward the surplus distribution changes from 95% to 90%, so the profitability will also increase gradually,” he said.
LIC’s IPO is expected to get regulatory approval by the first week of March, after which an indicative marketing price band will be determined.
The insurance giant last week filed a draft IPO prospectus with the markets regulator to potentially raise around $8 billion to sell a 5% stake in the Indian government.
LIC’s offer will also strengthen investors’ appetite for new equity deals, with several Indian companies that were listed below last year offering prices on concerns of higher valuations and interest rate hikes by central banks.
Kumar further said that LIC is well capitalized as of now and he does not think the company needs capital at this point of time. Going forward, if any development capital is required, we will approach not only the government but all the stakeholders, he added.
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