LIC (Life Insurance Corporation of India) policyholders are scheduled to benefit greatly from the LIC IPO, which will be coming soon. At the time of the launch of the LIC IPO, the Government of India (GoI) will reserve up to 10% interest for the LIC policyholders. Secretary Tuhin Kanta Pandey of the Department of Investment and Public Asset Management (DIPAM) reported on the good news for LIC policyholders that could come when the LIC IPO is launched. The LIC IPO launch date will be FY22 at some point.
LIC is India's largest insurance company, and the GoI requested actuarial firms to seek an estimate of the actual value of the LIC as a company. For the launch of the Lic IPO, Deloitte and SBI Capital was named by GoI as support companies for the launch of the LIC IPO.
Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal offices, 1381 satellite offices, and the Corporate office. LIC’s Wide Area Network covers 113divisional offices and connects all the branches through a Metro Area Network.
The LIC IPO date has not been announced as of yet. That said, according to the government of India, the LIC IPO is slated to open up for subscription sometime during the second half of this fiscal year.
Asset sale proceeds are crucial for the government to meet its spending requirements and lower the budget deficit that’s may widen to 9.5% of the gross domestic product this year -- against the aim of 3.5%.
What’s in it for LIC Policy Holders?
“Up to 10% reservation can be offered to policyholders of LIC”, Dipam secretary Tuhin Kanta Pandey told TOI in an interview.
The size of the upcoming LIC IPO would range somewhere between Rs. 70,000 crores to Rs. 1 lakh crores. However, the Finance Ministry, during the budget presentation, stated that the government was expecting to raise up to Rs. 90,000 crores through the stake sale of LIC and IDBI Bank.
As per some recent media reports, the Narendra Modi government plans to raise Rs 90,000 crore by selling a six to seven percent stake in LIC. LIC's value is around Rs 12.85-15 lakh crore, making it India's second most valued company after Reliance Industries Limited (RIL).
The price and other financial information will be available once the DRHP has been filed by the company. It is definitely going to be one of the largest and keenly awaited IPO in the coming fiscal.
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