LIC IPO: As January heads for its end, investors are likely to find the Life Insurance Corporation of India, or LIC, filing its draft red herring prospectus, or DHRP, within a few days that is by the end of the month. As per reports, the largest insurance company of India is preparing data to announce its final results for the December quarter, and is also preparing for the DHRP. Touted as India’s biggest public offering till date, the insurer will file its draft papers with the authorities during the week starting January 31. As per reports, the initial share sale will only see the participation of foreign investors if the company prepares the December numbers on time.
“Things are on the right track and we should be able to file the DRHP before the end of the month, which will give us enough time to complete the issue before the end of the fiscal,” a person involved in the deliberations told the Economic Times regarding the LIC IPO.
The LIC IPO is said to fetch Rs 15 lakh crore though its initial offer sale. The draft prospectus, which is to be filed soon, is likely to shed light on the size of the IPO, say reports. The government is looking to raise Rs 1 lakh crore through the share sale.
“It is expected that about 20 per cent of the shares will be taken by foreign investors, which means that the DRHP has to take into account US regulations as well which specify that for IPO investments, the results have to be updated till a maximum of 135 days before the listing date. So, it’s fair to assume that LIC will have to update its December numbers in its DRHP,” another person told ET.
According to the sources quoted by ET, finance minister Nirmala Sitharaman might give details of the LIC IPO in her budget speech.
According to a report by Bloomberg, the state-run insurer will also specify the number of shares going up for sale in its draft prospectus. As per the report, India is keen on pushing for a value of about Rs 15 lakh crore for the LIC IPO, while a completed valuation is still to be set. The embedded value of the LIC is likely to be more than Rs 4 lakh crore, while the market value of the company might be four times of that. Once all this is settled, the final value of the IPO would be in, which is subject to change depending on these factors.
The LIC has been publishing advertisements and luring domestic policyholders to make the upcoming IPO a success. The company has also urged policyholders to link their PAN with their LIC in order to invest in the insurer’s shares during the LIC IPO.