Govt files LIC DRHP, may mop up Rs. 1-lakh cr

LIC filed its draft red herring prospectus (DRHP) with SEBI.The issue is completely an offer for sale of 31,62,49,885 equity shares by the promoter, which holds a 100 per cent stake in the insurance behemoth. The President of India, acting through the Ministry of Finance, Government of India, is the promoter.

The government of India is selling a 5 per cent stake in the IPO.

50 per cent of the net issue is reserved for qualified institutional buyers (QIBs), whereas non-institutional buyers will have 15 per cent of shares allocated for them.

The retail portion has been fixed at 35 per cent of the offer. The issue is likely to have reservations for eligible employees and policyholders of the company, according to the DRHP.

One third of the anchor portion will be reserved for the domestic mutual funds, it added.

Actuarial firm Milliman Advisors LLP India had worked out the embedded value of LIC, while Deloitte and SBI Caps are appointed as pre-IPO transaction advisors. LIC has assets worth Rs 44 trillion as of the Financial Year 2020-21.

LIC has 8 zonal offices, which operate 113 divisional offices and 2,048 branches with 11.48 lakh agents across the country.

LIC has over 29 crore policyholders, having a separate quote for them if the policy is linked to their PAN Card.

“The DRHP of LIC IPO has been filed with the SEBI,” Department of  Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey tweeted.

Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, JM Financial, Goldman Sachs (India) Securities, ICICI Securities, Citigroup Global Markets India, JP Morgan India, Nomura Financial Advisory and Securities (India) and SBI Capital Markets are the book running lead managers for the company.

KFin Technologies has been appointed as the registrar for the issue. Shares of the company will be listed on both the NSE and BSE.

LIC has a 66 per cent market share in New Business Premiums with 28.3 crore policies and 13.5 lakhs agents as of 31st March 2021.

The embedded value of LIC as of 30th September 2021 is Rs 5,39,686 crore (about INR 5.4 trillion).