The central government is preparing to list Life Insurance Corporation of India (LIC) in the stock market in January next year. For this, the government may invite bids from merchant bankers to see the management of LIC’s disinvestment this month. The Department of Investment and Public Asset Management (DIPAM) had in January this year appointed actuarial firm Milliman Advisors LLP India for valuation of LIs. LIC’s IPO is considered to be the largest public issue in Indian corporate history.
A senior official said that the announcements made in the budget for changes in the LIC Act have been notified and the actuarial firm will complete the embedded evaluation of LIC in the next few weeks. Under the embedded value method, the present value of future profits of the insurance company is also included in the current net asset value (NAV).
We will invite bids for the appointment of merchant bankers in the next few weeks, the official said. Negotiations are also going on with institutional investors for this. He said that we are hopeful that by the end of November, we will get all the regulatory approvals. The official also said that 10 per cent of LIC’s IPO will be reserved for its policyholders.
The LIC Amendment Act has been made part of the Finance Act, to make necessary legislative amendments to launch the IPO of the country’s largest life insurer. Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.
The listing of LIC is considered very important for achieving the government’s disinvestment target. The government has set a disinvestment target of Rs 1.75 lakh crore through minimum stake sale and privatization in the current financial year. Out of this total target, an amount of Rs 1 lakh crore will be achieved through sale of government stake in public sector banks and financial institutions and Rs 75,000 crore from CPSE disinvestment.