LIC to file draft IPO document with SEBI by November
A finance ministry official said the country’s largest insurance company LIC may file draft documents with Sebi by November for the biggest IPO in the country’s history.
“Our target is to launch an IPO in this financial year and we have set a strict deadline,” the official said. DRHP will be filed by November.
The government last month roped in 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to manage the mega initial public offering of country’s largest insurer LIC. was appointed.
Other selected bankers include SBI Capital Markets Limited, JM Financial Limited, Axis Capital Limited, BofA Securities, JP Morgan India Private Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited.
Once the draft red herring prospectus (DRHP) is filed, merchant bankers will hold global and domestic road shows for investors by January, the official said.
Cyril Amarchand Mangaldas has been appointed as the legal advisor to the IPO.
The government is aiming to list the insurance giant within the current financial year ending March.
The official said the ministry is in the process of assessing the underlying value of the life insurer and once that is done, the ministerial panel on disinvestment will decide on the government stake, which will be disinvested through the IPO.
The government has appointed actuarial firm Milliman Advisors LLP India to calculate the embedded value of LIC before the initial public offering.
The government is also considering allowing foreign investors to take stake in the country’s largest insurance company LIC. As per SEBI regulations, Foreign Portfolio Investors (FPIs) are allowed to buy shares in a public offering. However, since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI norms with regard to foreign investor participation.
The Cabinet Committee on Economic Affairs had in July approved the initial public issue proposal of Life Insurance Corporation of India. LIC’s listing will be crucial for the government to meet its 2021-22 (April-March) disinvestment target of Rs 1.75 lakh crore.
So far this fiscal, Rs 9,110 crore has been raised through minority stake sale in PSUs and SUUTI stake sale in Axis Bank.
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