CORPORATE

LIC’s IPO set to roll out in Q4 of FY22: DIPAM Secretary Pandey

Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said on Wednesday that Life Insurance Corporation of India’s (LIC) IPO was expected to take place in the fourth quarter of the current financial year. He was speaking at the CII Global Economic Policy Summit 2021. 


Several media reports have suggested that the State life insurer’s IPO is expected to raise between Rs 40,000 crore and Rs 1,00,000 crore. The government may allow foreign direct investment (FDI) in the State insurer to enable a diversified and stronger demand across varied segments of investors. 


Several banks are expected to reach out to potential anchor investors for the IPO of LIC, next week, says a report of the Business Standard. This would be after the embedded value of the company is finalised. 


Embedded value helps gauge the cumulative value of shareholders’ interest in an insurance company. It is the sum of the present value of future profits and the net asset value of the company’s surplus and capital combined. The present value helps capture potential profits in future from already existing policies. The net asset value of capital and surplus calculates the funds belonging to shareholders accumulated in the past. 


The government has selected Goldman Sachs, JP Morgan Chase & Co, ICICI Securities, Kotak Mahindra Bank, Citigroup, SBI Capital Market, Axis Capital, Bank of America Securities and Nomura, among others, for the stake sale. 

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