LIC IPO: Timeline, Numbers May Be Revealed In Budget 2022
LIC IPO Details: DIPAM is the nodal agency for the listing of the insurer. It will ascertain the embedded value of LIC. Actuarial firm Milliman Advisor will assess the report.
New Delhi: The concrete numbers and details of the share price of LIC can be announced by Finance Minister Nirmala Sitharaman in her Budget 2022 speech. According to a report by The Economic Times, the life insurer is preparing its financial results for the last quarter ahead of the expected filing of a draft red herring prospectus (DRHP) by the end of January 2022.
The report further said that the company is also collecting data on its assets under management. DRHP will include the latest numbers and will provide the foreign investors with an opportunity to participate in the IPO. LIC IPO is expected to be launched in the current fiscal itself.
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The nodal agency for the listing of the life insurer is the Department of Investment and Public Asset Management (DIPAM). The embedded value, which estimates the net asset as well as the future profits, will also be ascertained by DIPAM, the report added. Further, to assess the report, the actuarial firm Milliman Advisors has been appointed.
Investments, Not Premium
According to the report, the government is aiming to raise close to Rs 1 lakh crore (Rs 1 trillion) from the LIC IPO. This will make it the largest IPO in the country till date.
The report further added that in the past few years, the insurer has seen income growth mainly because of rising investments rather than the insurance premium. In FY21, where the net profit increased from Rs 2,713 to Rs 2,907 (7 per cent growth), the increase in premium was very less. The premium grew from Rs 3.79 lakh crore to Rs 4.03 lakh crore.
Largest Life Insurer In India
The latest numbers will help the analysts to compare the government company with private life insurers. However, LIC is still the largest life insurance company with a 63 per cent share in the total renewal premium market. It controls a lion share of 71 per cent premium in rural India, the report said.
Listing of LIC will also be crucial for the government to meet its disinvestment target of Rs 1.75 lakh crore for the year. Till now, the report said, the government has only been able to raise Rs 9,330 crore from the sale of stakes in various PSUs.
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