LIC IPO: Insurance firm to list on bourses by March 31, says DIPAM Secretary

New Delhi: The government will list the country’s largest insurer LIC on the stock exchanges by the end of March, a senior official said on Thursday. Draft documents for the LIC Initial Public Offering (IPO) are being finalized and will soon be submitted to the market regulator Sebi for approval.

“The LIC disinvestment amount will be included in this year’s (budget) because we aim to list it before March 31,” Tuhin Kanta Pandey, secretary of the Department for Investment and Public Asset Management (DIPAM), told PTI.

The LIC IPO is crucial to meeting the disinvestment target set for the current fiscal end of March 2022.

The budget for 2021-2022 set a disinvestment goal of Rs 1.75 million, compared to the 32,835 crores collected in the last fiscal year. Of the 1.75 million rupees crores, 1 million crores should come from the sale of the state-owned stake in banks and financial institutions in the public sector, and 75,000 crores will come from CPSE disinvestment revenues.

So far, this fiscal, 9,330 crore has been cleared through the sale of a minority stake in PSU.

The Life Insurance Corporation of India (LIC) earlier this week reported a profit after tax of Rs 1,437 crore for the first half (April-September) of the current financial year, compared with Rs 6.14 crore in the previous year.

Its new business premium growth rate was 554.1 percent in the H1 FG22, up from 394.76 percent earlier.

The government last September appointed 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 the insurance behemoth.

Other selected bankers include SBI Capital Market Ltd, JM Financial Ltd, Axis Capital Ltd, BofA Securities, JP Morgan India Pvt Ltd, ICICI Securities Ltd and Kotak Mahindra Capital Co Ltd.

Cyril Amarchand Mangaldas has been appointed Legal Advisor for the IPO.

The government is in the process of deciding how much of its stake will be sold through the IPO. Read also: Vivo Y75 5G with 5000 mAh battery launched in India: price, specifications, features

Consideration is also being given to allowing foreign investors to take a stake in LIC. Under Sebi rules, foreign portfolio investors (FPIs) are allowed to buy shares in a public offering. However, as the LIC Act does not provide for foreign investment, there is a need to bring the IPO LIC in line with Sebi’s norms regarding the participation of foreign investors. Read also: PNB profit doubled to 1,127 crores in December

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