Network18 Exclusive: Sebi approves LIC IPO DRHP

State-owned insurance behemoth Life Insurance Corporation of India (LIC) on Tuesday has received capital markets regulator Sebi's go-ahead to raise funds through an initial share sale, sources privy to the developments told CNBC-TV18.

The government will sell over 31 crore equity shares of LIC, according to the draft red herring prospectus filed with Sebi. A portion of the IPO would be reserved for anchor investors. Also, up to 10 percent of the LIC IPO issue size would be reserved for policyholders.

The government was expecting to garner Rs 63,000 crore by selling a 5 percent stake in the life insurance firm to meet the curtailed disinvestment target of Rs 78,000 crore in the current fiscal.

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The IPO is offer for sale (OFS) by the Government of India and there is no fresh issue of shares by LIC. The government holds a 100 percent stake or over 632.49 crore shares in LIC. The face value of shares is Rs 10 apiece.
The LIC public issue would be the biggest IPO in the history of the Indian stock market. Once listed, LIC's market valuation would be comparable to top companies like RIL and TCS.

So far, the amount mobilised from the IPO of Paytm in 2021 was the largest ever at Rs 18,300 crore, followed by Coal India (2010) at nearly Rs 15,500 crore and Reliance Power (2008) at Rs 11,700 crore.

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Actuarial firm Milliman Advisors LLP India had worked out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.