LIC IPO embedded value to be upwards of Rs 5 lakh cr: DIPAM Secy

DIPAM Secretary Tuhin Kanta Pandey said that the embedded value – a measure of future cash flows – of the Life Insurance Corporation will be upwards of Rs 5 lakh crore. He added that there is a tremendous interest in the general public for the IPO. Pandey also said that the DRHP for the LIC IPO will be filed this week and the IPO is likely to take place next month. Pandey was speaking at the BT Budget Roundtable 2022, along with Finance Secretary Dr. TV Somanathan, Finance Secretary, and Revenue Secretary Tarun Bajaj.

Pandey said that the company is at an early stage of marketing of the IPO. He said that once the draft papers are filed this week, the price will be discovered. 

During the session, Pandey said that the insurer is carrying on a big campaign to get policyholders to enlist their PAN and demat accounts so that they can participate in the public offering. 

He added that the government wants the policyholders to be stakeholders and shareholders in the state insurer and also hinted about possible discounts. 

The DIPAM Secretary added that since LIC is a very large organisation, it will be a big moment for the Indian stock market. “A big market cap is coming to the stock market,” he added. 

#BudgetRoundtable | #LICIPO is all planned, it is in the execution stage. That also will be completed soon, tells FM @nsitharaman tells @AabhaBakaya pic.twitter.com/BUmMKq0hrB

— Business Today (@business_today) February 7, 2022

Tuhin Kanta Pandey’s statement comes after Finance Minister Nirmala Sitharaman said during the Budget 2022 announcements that the LIC IPO is expected shortly. “Towards implementation of the new Public Sector Enterprise policy, the strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected. The public issue of the LIC is expected shortly. Others too are in the process for 2022-23,” said the minister without elaborating much on the public issue of the insurer.

LIC has a majority share of the life insurance market in India and the government hopes proceeds from the IPO will help bridge a deficit gap this fiscal year. Listing will also bring more transparency into the working of the state-run company.

Also read: Budget 2022: LIC IPO 'shortly,' but path fraught with challenges

Also read: LIC DRHP to be filed this week, says DIPAM Secy