LIC likely to launch IPO on March 11: Reports

18 Feb 2022 , 07:00 PM

Life Insurance Corp (LIC), the country’s largest insurance company, is likely to open for anchor investors on March 11, 2022, as per media reports. LIC initial public offering(IPO) is expected to obtain regulatory approval by the first week of March, after which an indicative marketing price band will be set, the media reports added.

India’s biggest IPO Life Insurance Corp (LIC) filed a draft IPO prospectus on Sunday with the market regulator to sell 5% of the Indian government’s stake to potentially raise nearly $8 billion.

As per the DRHP, LIC will offer 316,249,885 equity shares as an offer for sale having the face value of Rs10 each under the IPO. The President of India acting through the Ministry of Finance, Government of India will be the selling promoter in the issue.

Currently, the government holds a 100% stake or over 632.49 crore equity shares in the LIC. The more than 31.6 crore equity shares that are set to be offered in the IPO accounts for only 5% of the total stake held by the Centre in LIC.

The objects of the Offer are to (i) achieve the benefits of listing the Equity Shares on the Stock Exchanges; and (ii) carry out the Offer for Sale of up to 316,249,885 Equity Shares by the Selling Shareholder.

The Selling Shareholder (President of India acting through the Ministry of Finance, Government of India) will be entitled to the entire proceeds of the Offer after deducting the Offer expenses and relevant taxes thereon. Our Corporation will not receive any proceeds from the Offer.

Details of the price band, offer size in value terms, employee discount and reservation, policyholders reservation portion, investors reservation portion, issue opening date and closing – are some of the factors that will be disclosed in due course.

Under the DRHP, it has been highlighted that the IPO may include reservation of up to certain equity shares for eligible employees and policyholders of LIC.

LIC was created on September 1, 1956, when 245 private life insurance companies in India were merged and nationalized. Till 2000, it was India’s only life insurance company. Based on its size, market relevance, and domestic and global interconnection, IRDAI classified it as a Domestic Systemically Important Insurer (“D-SII”) in September 2020.

As of September 30, 2021, LIC had 2,048 branch offices and 1,554 satellite offices across India, covering 91% of the country’s districts. In addition to its life insurance business in India, it has branches in Fiji, Mauritius, and India.