Govt files DRHP with Sebi for LIC IPO
IPO may hit the capital market in March; Govt will sell over 31 crore equity shares of LIC
image for illustrative purpose
Mumbai: Life insurance behemoth, Life Insurance Corporation (LIC) of India on Sunday filed the draft red herring prospectus (DRHP) for the offer for sale (OFS) of its IPO with the capital markets regulator, SEBI here. IPO may hit the capital market in March.
Recently, insurance regulator IRDAI's board had cleared the proposal of LIC in this connection.
Bizz Buzz has seen a copy of the DRHP of the biggest IPO in the country's stock market history.
SEBI norms mandate dilution of a minimum stake of 5 per cent, which had been done by the government that owns 100 per cent in the firm. In fact, this amendment was done by SEBI specifically in view of LIC IPO.
The IPO-bound national insurer Life Insurance Corporation (LIC) is not only the world's largest when it comes to home-market share with over 64.1 per cent of the total gross written premium as of 2020 but also the one that offers the highest return on equity at 82 per cent, apart from being the third largest in terms of life insurance premium, says
a Crisil report. Bizz Buzz had already reported about it in its edition dated February 10. LIC is the market leader in this metric as well generating Rs 1.2 trillion of net cash as of FY21, which is more than 4 times the net cash added by the second-best player in this metric- SBI Life generating Rs 283 billion in the same fiscal.
While for LIC the market share has been steadily declining, down from 100 per cent in the pre-2000 era to 71.8 per cent in 2016 and further down to 64.1 per cent in 2020, for SBI Life, which is the second largest in the country, the same was only 5 per cent in 2016 and 8 per cent in 2020, Crisil said in a report prepared in November 2021.
