Government Files Updated DRHP With SEBI For LIC IPO

Government files updated DRHP with SEBI for LIC IPO, submit the financial statement for December quarter.

The government has filed an updated draft document with markets regulator SEBI for the initial public offering (IPO) of LIC, which includes the insurance giant’s December quarter financial statements.

An official gave this information on Monday. On February 13, the government had filed a draft red herring prospectus (DRHP) with the regulator for the mega IPO.

Government files updated DRHP with SEBI: Detailing the financial results till September, after which the DRHP got SEBI’s nod earlier this month.

“The updated DRHP of LIC has been filed with the December financials,” an official said. He said as per SEBI it was required to be filed.

As per the updated financial position, Life Insurance Corporation posted a net profit of Rs 235 crore in the October-December quarter.

Its net profit rose to Rs 1,671.57 crore in April-December 2021 from Rs 7.08 crore a year ago, according to a media report. That is, it has jumped about 236 times.

Significantly, the government is expecting to raise over Rs 60,000 crore by selling around 316 crore shares or a 5 percent stake in the life insurance company to meet the disinvestment target of Rs 78,000 crore in the current fiscal.

The IPO was earlier planned to launch in March but the Russia-Ukraine crisis derailed the plan as the stock market became highly volatile.

Right now the government has time till May 12 to launch the IPO without filing new documents with the Securities and Exchange Board of India.

According to international actuarial firm Milliman Advisors, the embedded value of LIC as of 30 September 2021 is estimated to be around Rs 5.4 lakh crore.

However, the market valuation of LIC in DRHP has not been disclosed. As per industry standards, it (LIC’s market value) will be around 3 times the embedded value.