Accelerating preparation to bring in the initial public offer you (IPO) of insurance coverage behemoth Life Insurance Corporation by March 2022, the division of investment and public asset management (DIPAM) on Wednesday appointed 10 bankers, which includes Goldman Sachs (India) Securities and JP Morgan India.
Other bankers to work as book operating lead managers for the mega IPO are ICICI Securities, JM Financial, Citigroup Global Markets India, Nomura Financial Advisory and Securities, Kotak Mahindra Capital, SBI Capital Markets, DSP Merrill Lynch and Axis Capital.
DIPAM also appointed KFintech as registrar and share transfer agent for the IPO and Concept Communication as the marketing agency. The mega IPO, which will entail aspect-sale of government’s stake in LIC and fresh equity issuance by the insurer, will be the biggest in India.
The percentage of paid-up equity to be issued/divested as aspect of the IPO will be determined based on the post concern capital of LIC, calculated in consonance with the Clause 19 (2) of the Securities Contracts (Regulation) Rules, 1957 (SCRR), DIPAM had stated. “The potential size of the IPO is expected to be far larger than any precedent in Indian Markets. In order to achieve a successful IPO, it is the endeavor of the GoI to attract investment from institutional investors, both domestic and global, in addition to the retail investors,” DIPAM had stated.
Even even though the actual size is not however revealed, the IPO could be up to 5-10% of the equity of LIC, based on the industry appetite at the time of the offer you.
While the valuation of the insurer, which generally plays White Knight to the government, will be identified closer to the listing, it is believed to be worth Rs 8-11.5 lakh crore, which means a 10% IPO could fetch the government something in between Rs 80,000 and Rs one hundred,000 crore. Private valuation firm RBSA Advisors not too long ago estimated LIC’s worth to be in between Rs 9.9 and Rs 11.5 lakh crore.
The government has budgeted Rs 1 lakh crore from disinvestment of government stakes in public sector monetary institutions and banks in FY22. After the transition of LIC into Companies Act is completed, the IPO preparation could take at least six months just before the offer you hits the industry.
LIC has the lion’s share in India’s insurance coverage enterprise with close to 70% 1st-year life insurance coverage premia fetched by it — thanks partly to the comfort of sovereign assure.
In the Budget for FY22, the government brought in 27 amendments to the LIC Act to facilitate the listing. Among other tweaks, the amendments will lead to restating books of accounts in compliance with the Companies Act.