The initial public offering (IPO) of India's largest insurer Life Insurance Corporation (LIC) may be launched in mid-May as the Russia-Ukraine war-triggered volatility is expected to subside by that time, said a Bloomberg report.
LIC’s published embedded value will be valid for the IPO until May as per rules. A delay beyond that would mean LIC would have to re-calculate the embedded value, a key valuation gauge for insurance firms, based on the latest financials, said the report, quoting a source who declined to be named.
The government has time till May 12 to launch the LIC IPO with seeking fresh approval of market regulator Sebi, an official told PTI news agency.
If the government misses the May 12 deadline, LIC would have to file fresh papers with Sebi giving the results of the December quarter and also update the embedded value.
The government filed the draft red herring prospectus (DRHP) for the IPO with Sebi on February 13. As per LIC’s DRHP, the insurance major has nearly 29 crore policyholders, a 74.6 percent market share in terms of a number of individual policies issued, and an 81.1 percent market share in terms of a number of group policies issued for the financial year 2021.
The company has reserved up to 10 percent of the offer size for its policyholders. Further, the government, which owns 100 percent of LIC, plans to give a discount to the policyholders in the IPO.
The Centre was expected to garner over ₹60,000 crore by selling about 31.6 crore or 5 percent shares in the life insurance firm to meet the curtailed disinvestment target of ₹78,000 crore in the current financial year.
At 5 percent stake dilution, the LIC IPO would be the biggest ever in the history of the Indian stock market, and once listed LIC's market valuation would be comparable to top companies like RIL and TCS.