Cabinet nod to mega LIC public offer – Times of India

NEW DELHI: The stage is set for the country’s biggest IPO with the Union Cabinet approving the share sale of the state-run insurance behemoth Life Insurance Corporation of India (LIC).
Agency reports said the Cabinet Committee on Economic Affairs, which met last week, had cleared the IPO of LIC. While no official announcement has been made about the approval, sources said the issue was part of the agenda for the Cabinet meeting.
The report said that a panel headed by finance minister Nirmala Sitharaman will decide on the exact amount of stake dilution. Indications are that the government plans to unveil the mega IPO by the end of the current fiscal year.

LIC’s IPO is expected to be the biggest in India with many analysts expecting a share sale in excess of Rs 1 lakh crore. Besides its sheer size, the corporation is seen as valuable given its share of new business and high persistency among policyholders.
It is part of the government’s plan to raise Rs 1.75 lakh crore from asset sales in state-run companies in the current fiscal, which ends in March. The government also plans to privatise two public sector banks and a state-run insurance company as part of its overall privatisation drive to raise resources.
To ensure that the LIC IPO takes place during the current fiscal, work is in progress on multiple fronts.
The government has put in place all the legislative changes and has also extended LIC chairman M R Kumar’s term by nine months.
LIC has appointed Milliman as the actuary and EY as the adviser for calculating the embedded value of the firm. Embedded value is a valuation method unique to insurance companies that includes the net present value of future earnings from policies and is crucial for pricing shares.
LIC is also planning to audit its half-yearly accounts for the period ended September 2021 for the first time.