Cabinet likely to consider proposal for FDI in IPO-bound LIC on Saturday
New Delhi Feb 25 PTI The Union Cabinet is likely to consider on Saturday a proposal seeking changes in the foreign direct investment FDI policy to facilitate disinvestment of the countrys largest insurer LIC sources said The Department for Promotion of Industry and Internal Trade DPIIT has mooted the proposal after taking views from the finance ministry The Cabinet will take up the matter tomorrow a source said According to the current FDI policy 74 per cent foreign investment is permitted under the automatic route in the insurance sector However these rules do not apply to the Life Insurance Corporation of India LIC which is administered through a separate LIC Act As per Sebi rules both FPI and FDI are permitted under public offer However since the LIC Act has no provision for foreign investments there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation The Cabinet had in July last year approved the initial public offering IPO of LIC and the stake sale is being planned for the current March quarter Setting the stage for the countrys biggest-ever public offering Life Insurance Corporation on February 13 filed draft papers with capital market regulator Sebi for the sale of 5 per cent stake by the government for an estimated Rs 63000 crore The initial public offering of over 316 crore shares or 5 per cent government stake is likely to hit D-street in March Employees and policyholders of the insurance behemoth would get a discount over the floor price According to the draft red herring prospectus DRHP LICs embedded value which is a measure of the consolidated shareholders value in an insurance company has been pegged at about Rs 54 lakh crore as of September 30 2021 by international actuarial firm Milliman Advisors Although the DRHP does not disclose the market valuation of LIC as per industry standards it would be about three times the embedded value or around Rs 16 lakh crore The LIC public issue would be the biggest IPO in the history of the Indian stock market Once listed LICs market valuation would be comparable to top companies like RIL and TCS So far the amount mobilised from IPO of Paytm in 2021 was the largest ever at Rs 18300 crore followed by Coal India 2010 at nearly Rs 15500 crore and Reliance Power 2008 at Rs 11700 crore PTI RR ANZ ABM ABM
New Delhi Feb 25 PTI The Union Cabinet is likely to consider on Saturday a proposal seeking changes in the foreign direct investment FDI policy to facilitate disinvestment of the countrys largest insurer LIC sources said The Department for Promotion of Industry and Internal Trade DPIIT has mooted the proposal after taking views from the finance ministry The Cabinet will take up the matter tomorrow a source said According to the current FDI policy 74 per cent foreign investment is permitted under the automatic route in the insurance sector However these rules do not apply to the Life Insurance Corporation of India LIC which is administered through a separate LIC Act As per Sebi rules both FPI and FDI are permitted under public offer However since the LIC Act has no provision for foreign investments there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation The Cabinet had in July last year approved the initial public offering IPO of LIC and the stake sale is being planned for the current March quarter Setting the stage for the countrys biggest-ever public offering Life Insurance Corporation on February 13 filed draft papers with capital market regulator Sebi for the sale of 5 per cent stake by the government for an estimated Rs 63000 crore The initial public offering of over 316 crore shares or 5 per cent government stake is likely to hit D-street in March Employees and policyholders of the insurance behemoth would get a discount over the floor price According to the draft red herring prospectus DRHP LICs embedded value which is a measure of the consolidated shareholders value in an insurance company has been pegged at about Rs 54 lakh crore as of September 30 2021 by international actuarial firm Milliman Advisors Although the DRHP does not disclose the market valuation of LIC as per industry standards it would be about three times the embedded value or around Rs 16 lakh crore The LIC public issue would be the biggest IPO in the history of the Indian stock market Once listed LICs market valuation would be comparable to top companies like RIL and TCS So far the amount mobilised from IPO of Paytm in 2021 was the largest ever at Rs 18300 crore followed by Coal India 2010 at nearly Rs 15500 crore and Reliance Power 2008 at Rs 11700 crore PTI RR ANZ ABM ABM
