IRDAI approves draft papers for LIC IPO, DRHP filing with SEBI likely to be tomorrow: Report

The IPO proposal was cleared by IRDAI in its board meet yesterday. The LIC DRHP filing with SEBI is likely to happen tomorrow, i.e on February 11, 2022.

According to a report by CNBC TV18, the Insurance Regulatory & Development Authority of India has passed LIC’s proposal for an initial public offering (IPO). The IPO proposal was cleared by IRDAI in its board meet yesterday. The LIC DRHP filing with SEBI is presently likely to happen tomorrow, i.e on February 11, 2022. The quantum of divestment is not mentioned in LIC’s proposal to the insurance regulator. It is expected to be cited in DRHP with embedded value numbers.

The government intends to keep a portion of IPO for LIC policyholders, who could also receive discounts as the government wishes to rope in a larger section of retail investors. Likewise, the government is in the procedure of approving a 20 per cent foreign investment barrier in LIC to rope in foreign investors to make the IPO a tremendous success. The IPO is predicted to arrive in markets by mid-March.

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Actuarial firm Milliman Advisors LLP India has figured out the embedded value of LIC, while Deloitte and SBI Caps have been elected as pre-IPO transaction advisors. Under the embedded value procedure, insurance companies’ present value of future profit is also comprised in their present net asset value (NAV).

The government has elected 10 merchant bankers, comprising Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to regulate the mega IPO of the country’s biggest insurer.

The much-awaited LIC IPO is predicted to be the greatest ever witnessed by the country. LIC’s IPO may help the government achieve its revised divestment mark of Rs 78,000 crore, down from the initial mark of Rs 1.75 lakh crore. So far this financial year the government has arranged to raise Rs 12,000 crore from divestment receipts.