LIC IPO: SEBI's approval for draft prospectus expected before Mar 10

Government-owned insurer Life Insurance Corporation (LIC) is expected to receive approval for its draft red herring prospectus by SEBI within 10 days from now. Sources say that approval from SEBI is expected before March 10. 

Last week, the Union Cabinet permitted up to 20 per cent foreign direct investment (FDI) under automatic route in IPO-bound LIC with an aim to facilitate disinvestment of the country's largest insurer. The decision in this regard was taken by the Cabinet, chaired by Prime Minister Narendra Modi.  

As per the DRHP, up to 31,62,49,885 (31.62 crore) equity shares will be on offer through the offer for sale (OFS), representing 5 per cent of equity stake. There will be no fresh issue of shares.

LIC's embedded value stood at Rs 5,39,686 crore as of September 30, 2021.

Eligible policyholders may get a discount to the offer price and it will be announced at least two working days prior to the bid/offer opening date, it said. Up to 60 per cent of QIB portion will be allocated to anchor investors, while one-third of anchor investor portion will be reserved for domestic mutual funds.

LIC's current promoter is the President of India, acting through the Ministry of Finance, Government of India. The promoter currently holds 100 per cent of the pre-offer paid-up equity share capital of the Corporation.

The government has appointed 10 merchant bankers, including Kotak Mahindra Capital, Goldman Sachs (India) Securities Pvt Ltd, Citigroup Global Markets India Pvt Ltd and Nomura Financial Advisory and Securities (India) Pvt Ltd, to manage the mega IPO of the country's largest insurer.

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

Also read: LIC IPO: Expected price band, market share, financials; 10 things to know