New Delhi: The government is eyeing an assessment of more than RS 13 Lakh Crore to Rs 14 Lakh Crore for a government-managed life insurance company in India (LIC).
Although the final decision has not been sealed.
While several numbers floating in the market in the largest public process in the country, it was studied that the government would look for higher market values, while leaving a few reversions in tables for investors, especially those from the retail segment.
Initially, part of the public offer will be intended for company policy holders when the government seeks to democratize share ownership.
Draft Red Herring Prospectus (DRHP) for IPO is expected to be submitted for the next two days and the government can see to sell 4-5% of the shares, according to the feedback from market sources.
Sources have shown that the embedded value of the insurance giant can be more than RS 5 Lakh Crore.
Embedded value is the size of the consolidation value of shareholders’ interests in insurance companies.
Sources have shown that market value can be a score of three four times.
During the past two months, LIC agents have reached out policy holders, asking them to open a storage account, notify them that they will be eligible to get shares at preferential prices.
The corporation has also reached shareholders who asked them to update their pot figures on policies on their website.
This will allow the company to verify whether applicants are policyholders or not.
Changing the majority of policyholders will also allow the government to liberalize the policy of the surplus distribution in the future.
At present, the surplus is distributed in a 95: 5 ratio between policyholders and shareholders, even though the law allows the ratio of 90:10.
Mega IPO for LIC, which is the name of the household in this country, is very awaited by investors and financial markets.
Dipa Dipa Secretary Tuhin Kanta Pandey has told TII in a post-budget interview that the government will reveal the size of the IPO of LIC within a week.