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January 12, 2022

Life Insurance Corporation of India likely to file prospectus for IPO soon 

State-owned insurance behemoth Life Insurance Corporation of India (LIC) is aiming to file a prospectus for its initial public offering (IPO) soon, reported Bloomberg.

The insurer is looking to file its draft prospectus in the week starting 31 January 2022, the media outlet reported citing sources.

The prospectus will provide the embedded value of the life insurer along with the number of shares available for float, the sources said.

Sources stated that the deliberations are private, and the schedule is subject to change due to the spread of Covid-19.

If everything goes as planned, the listing of the insurer would happen by the end of March, providing revenue to bridge the budget gap.

As per Bloomberg’s earlier report, the government had plans to sell a 5%-10% stake in the LIC to raise nearly $13.6bn (INR1 trillion) on the top end.

The government is yet to receive a report on the valuation of LIC and the projected valuation may change based on that, the sources said, adding that the LIC’s valuation could be over as much as five times the embedded value.

The country’s Finance Minister Nirmala Sitharaman first announced LIC’s IPO during the 2020-21 budget.

Ten banks including Kotak Mahindra Bank, Goldman Sachs, JPMorgan Chase and ICICI Securities have been selected to manage the IPO.

The Indian government is also weighing its options to allow as much as 20% foreign direct investment in the LIC.

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