Govt to sell 5% in LIC via IPO; embedded value nearly Rs 5.4 lakh cr
New Delhi, Feb 13: The government on Sunday filed draft papers with capital market regulator Sebi for selling 5 per cent stake in insurance behemoth LIC through an initial public offering which is likely to hit D-street in March.
"The DRHP of LIC IPO has been filed today with the SEBI. For filing valuation about 31.6 crore shares are on offer representing 5 per cent equity," Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.
As per the draft red herring prospectus, LIC's embedded value has been pegged at about Rs 5.4 lakh crore as of September 30, 2021, by international actuarial firm Milliman Advisors.
Under the embedded value method, insurance companies' present value of future profit is also included in its present net asset value (NAV).
The IPO is 100 per cent offer for sale (OFS) by the Government of India and no fresh issue of shares by Life Insurance Corporation (LIC).
"LIC has 66 per cent market share in new business premiums with 283 million policies and 1.35 million agents as of March 31, 2021," Pandey added.
The government, however, did not disclose in the DRHP the market valuation of LIC or the discount which will be given to policyholders or LIC employees in the public offering.
The IPO of LIC is expected by March and the proceeds would be crucial to meet the revised disinvestment target of Rs 78,000 crore for the current fiscal. So far, the government has raised Rs 12,030 crore through CPSE disinvestment and Air India strategic sale this fiscal.
The government has appointed 10 merchant bankers, including Kotak Mahindra Capital, 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 IPO of the country's largest insurer.
The government is also mulling allowing foreign investors to pick up stake in LIC. As per Sebi rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer.
FDI policy would have to be tweaked for FII/FPI investment in this IPO, as LIC is a corporation and not an insurance company. The Cabinet Committee on Economic Affairs had in July last year cleared the proposal for LIC's IPO.
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Congress using hijab issue to pacify minority anger, alleges Karnataka LoP R Ashoka
Bengaluru: Leader of Opposition in the Assembly R. Ashoka has accused the Congress government of using the hijab issue to placate what he described as discontent among minority voters after the Davanagere by-election.
In a post on X on Wednesday, Ashoka alleged that the state government, instead of addressing issues such as price rise, corruption, farmers’ distress and law and order, was attempting to retain its minority vote base by reviving the hijab issue.
Referring to the 2022 dress code introduced by the BJP government, which prohibited hijab in schools and colleges, Ashoka said the Karnataka High Court had upheld the policy and emphasised the importance of discipline in educational institutions.
He questioned the Congress government’s move to revisit the issue and asked whether setting aside the court-backed policy to benefit one community could be described as secularism.
Ashoka further alleged that while the government was willing to permit hijab, it continued to prohibit saffron shawls.
He accused the government of dividing students on religious lines rather than treating schools and colleges as spaces of equality.
Drawing a comparison with Mamata Banerjee’s government in West Bengal, Ashoka claimed that excessive appeasement politics had harmed the state and warned that the Congress in Karnataka could face a similar political response.
He said voters in Karnataka would teach the Congress a lesson for what he termed “vote-bank politics” and for compromising constitutional and judicial principles.
