“Updated DRHP from LIC with December financial data has been submitted,” an official said, adding that it should be done according to Sebi observations.

The government has submitted updated draft documents to market regulator Sebi for an initial public offering from LIC, which will include the insurance giant’s December financial figures, an official said Monday.

In the run-up to the mega-IPO on February 13, the government had submitted the draft red herring prospectus (DRHP) to the regulator until September, detailing financial results. The DRHP received approval from Sebi at the beginning of this month.

“Updated DRHP from LIC with December financial data has been submitted,” an official said, adding that it should be done according to Sebi observations.

According to the updated financial data, the Life Insurance Corporation reported a net profit of Rs 235 crore in the October-December quarter. The net profit in April-December 2021 rose from Rs 7.08 crore a year ago to Rs 1,671.57 crore.

The government expects to collect more than Rs 60,000 crore by selling about 31.6 crore or 5 percent of the shares in the life insurance company to meet the limited divestment target of Rs 78,000 crore in the current fiscal year.

The IPO was originally scheduled to launch in March, but the crisis between Russia and Ukraine has derailed plans as stock markets are highly volatile.

The government has until May 12 to launch the IPO without filing any new papers with the Securities and Exchange Board of India.

The embedded value of LIC, which is a measure of consolidated shareholder value in an insurance company, was set at approximately Rs 5.4 lakh crore on September 30, 2021 by the international actuarial firm Milliman Advisors.

While the DRHP does not disclose the market value of LIC, by industry standards it would be approximately 3 times the embedded value.

At a share dilution of 5 percent, LIC’s IPO would be the largest ever in the history of the Indian stock market and once listed, its market value would be comparable to top companies such as RIL and TCS.

So far, the amount mobilized from Paytm’s IPO in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore. During the current fiscal year, Rs 12,423.67 crore has so far been brought in through for sale, employee OFS, strategic divestment and repurchase. The target for the full tax is Rs 78,000 crore.

For the next fiscal year, the divestment target has been set at Rs 65,000 crore.


This post LIC submits updated DRHP papers with SEBI for IPO was original published at “https://www.financialexpress.com/market/lic-ipo-government-files-updated-draft-papers-with-sebi-for-life-insurance-corporations-65000-crore-ipo/2466778/”

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