The decision in this regard was taken by the cabinet headed by Prime Minister Narendra Modi.
Sources said the Union Cabinet on February 26 had allowed foreign direct investment (FDI) of 20% under the automatic route in IPO-bound LIC with a view to facilitate disinvestment of the country’s largest insurer.
The decision in this regard was taken by the cabinet headed by Prime Minister Narendra Modi. The government has approved listing of LIC’s shares in the stock market through IPO.
Foreign investors may be interested in participating in the mega IPO. However, the extant FDI policy does not have any specific provision for foreign investment in LIC, which is a statutory corporation established under the LIC Act, 1956.
Since as per the extant FDI policy, the foreign inflow limit for public sector banks under the government approval route is 20%, it has been decided to allow foreign investment up to 20% for LIC and other such corporate bodies.
Further, to expedite the process of raising capital, FDI has been placed under the automatic route, as is the case with the rest of the insurance sector, said a source.
The increased FDI inflows will complement domestic capital, technology transfer, skill development for accelerated economic growth and growth across sectors.
Setting the stage for the country’s biggest ever public offering, Life Insurance Corporation on February 13 filed draft papers with capital markets regulator Securities and Exchange Board of India (SEBI). For the sale of 5% stake for an estimated ₹63,000 crore by the Govt.
The initial public offering (IPO) of over 31.6 crore shares or 5% government stake is likely to hit D-Street in March. Employees and policyholders of the insurance giant will get a discount on the floor price.
According to the draft Red Herring Prospectus (DRHP), the embedded value of LIC, which is a measure of the value of consolidated shareholders in an insurance company, has been pegged at around Rs 5.4 lakh crore by international actuarial firm Milliman as of September 30, 2021. Advisor.
Though DRHP does not disclose the market valuation of LIC, by industry standards it would be almost three times the embedded value or around ₹16 lakh crore.
LIC Public Issue will be the biggest IPO in the history of Indian stock market. Once listed, LIC’s market valuation will be at par with top companies like RIL and TCS.
So far, the amount raised from Paytm’s IPO in 2021 was ₹18,300 crore, followed by Coal India (2010) at ₹15,500 crore and Reliance Power (2008) at ₹11,700 crore.
,