A finance ministry official said the country’s largest insurance company Life Insurance Corporation (LIC) will file draft documents for the largest initial public offering (IPO) in the country’s history with the Securities and Exchange Board of India (SEBI) by November. can. .
“We aim to launch an IPO in this financial year and have set a strict deadline,” the official said. The draft Red Herring Prospectus (DRHP) will be filed by November.
Once the DRHP is filed, merchant bankers will conduct global and domestic roadshows for investors by January, the official added.
The government last month appointed 10 merchant bankers, including Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to manage the LIC IPO.
Other selected bankers are SBI Capital Markets Limited, JM Financial Limited, Axis Capital Limited, BofA Securities, JP Morgan India Private Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited.
Cyril Amarchand Mangaldas has been appointed as the legal advisor to the IPO.
The government is aiming to list the insurance giant within the current financial year.
The official said the ministry is in the process of assessing the underlying value of the life insurer and once that is done, the ministerial panel on disinvestment will decide on the government stake which will be disinvested through IPO.
The government has appointed actuarial firm Milliman Advisors LLP India to calculate the embedded value of LIC before the initial public offering.
The government is also considering allowing foreign investors to take stake in the country’s largest insurance company. As per SEBI regulations, Foreign Portfolio Investors (FPIs) are allowed to buy shares in a public offering. However, since there is no provision for foreign investment in the LIC Act, the proposed LIC IPO needs to align with SEBI norms with regard to foreign investor participation.
The Cabinet Committee on Economic Affairs had in July approved the initial public issue proposal of Life Insurance Corporation of India.
The listing of LIC will be crucial for the government to meet its disinvestment target of Rs 1.75 lakh crore for 2021-22.