Mumbai: Life Insurance Corp.
of India (LIC), the largest insurance company in the country, on Sunday submitted a paper with the regulator market for the public through the initial public offer, was designated as the largest in India.
Through this IPO the promoter, the government, selling 31.6 crore shares, translating to equity 5% of insurance companies.
Lic ruled out 35% of the offer, or nearly 11.1 crore shares, for retail investors, the design of the prospectus showed.
Previously, an insurance company also said that it would order a portion of the IPO for his policy holder but the right amount below this category was not yet resolved and therefore was not disclosed in the prospectus.
LIC has not revealed the discount that will be given to policyholders, LIC employees and retail investors at the IPO.
In this year’s budget speech, Minister of Finance Nirmala Sitharam said the IPO LIC would be completed before the end of the fiscal.
This means that one of the largest insurance companies in the world with a premium net obtained will be listed before March 31 this year.
After being registered, LIC is expected to be one of the most valuable companies in India.
In run-up to submit a prospectus, the government’s sources have told the Toi that it was looking at the market assessment around Rs 15 Lakh Crore for LIC.
To get an assessment that IPO needs to be appreciated around Rs 2,370 per share while for the assessment of RS 16 Lakh Crore the offer price must be around Rs 2,530.
And, for the assessment of Rs 13 Lakh Crore should be around Rs 2,060 per share, the calculation shows.
At present, the dependency industry, with 16.1 lakh crore rs market capitalization, is the most valuable Indian company, while TCS is in number two with the market value of RS 13.7 lakh Crore, BSE data shows.
The insurance company has 66% of the market share in New Biz Premium which was founded in 1956, for the government per share cost acquisition of LIC shares was 16 Paise, the prospectus showed.
Life Insurer has an embedded value of Rs 5.4 lakh crore on September 30, 2021, calculated by the Milliman Advisors International Actuarial Company.
For insurance companies, embedded value is one of the most relevant assessment parameters that consider the present value of the company’s future profit and free surplus, among others.
“DRHP LIC IPO has been submitted today (Sunday) with SBI,” Tuhin Kanta Pandey, Secretary, Department of Investment and Management of Public Assets (DIPAM) Tweet at night.
“LIC has a 66% market share in a new business premium with 283 million policies and 1.35 million agents on March 31, 2021.” LIC divestment is very important for the government to meet the Fiscal divestment target of 2022 RS 78,000 Crore.
In recent months, Indian water sales and Neelachal Ispat have become the main ones, both of which are purchased by Tata Group.
The government has appointed 10 trader bankers for the IPO with the Mahindra Capital box leading the package.
Other merchant bankers include the Goldman Sachs (India) effect, Citigroup Global Markets India and Nomura Financial Advisory and Securities (India).