10 banks to manage $8bn IPO
A strong investor response is expected to the Government’s sale of 5% in Life Insurance Corporation (LIC) worth about Rs.63,000 crore or about US$8 billion, the biggest initial public offer (IPO) in India.
The IPO initial offer of over 31.6 crore shares or 5% government stake was filed with the regulator SEBI on 13 Feb 2022. It is likely to hit the D-street in March.
Employees and policyholders of the insurance behemoth would get a discount over the floor price, according to Press Trust of India.
LIC’s embedded value, which is a measure of the consolidated shareholders’ value in an insurance company, has been pegged at about Rs.5.4 lakh crore as of 30 September 2021 by international actuarial firm Milliman Advisors.
The LIC IPO has been filed with the SEBI, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said.
Banking sources expect the Government to garner up to Rs.63,000 crore from the IPO.
The Government-owned LIC has over 632.49 crore shares, each priced at Rs.10.00.
LIC dominates the country’s under-served insurance sector with a 66% market share as of 31 March 2021, according to Pandey.
LIC, as a public entity, leads in implementing policy-driven insurance schemes and maintains a lead over private-sector insurers in an Rs.6.2 lakh crore industry as per fiscal 2021, which rose in value from Rs.5.7 lakh crore on the year.
Ten 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, have been appointed to manage the IPO. fiinews.com
