The much-anticipated initial public offering (IPO) of the state-run Life Insurance Corporation of India (LIC) may being in discounts to the millions of policyholders of the insurance giant, who participate in the bidding, a top government official has said as per reports.
The statement was made by department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey, as the government prepares to file its draft red herring prospectus, or DHRP, with market regulator Sebi for the LIC IPO later this week.
“Under the retail window, certain reservation is there. We also have a policyholders’ window. We have made provisions under the LIC Act that up to 10 per cent of the issue can be offered to policyholders at some discount on the competitive basis. There will be reservation for employees also,” Pandey was quoted as saying by Livemint.
As per the report on Livemnint, people close to the transaction secretary of the IPO on the condition of anonymity also said that there might be some concessions for retail buyers and employees. They refused to give out further details. Pandey, who confirmed on discounts for policyholders, did not comment anything on the other two categories, the report said.
One of the sources also said that the discount will be provided to encourage the participation of common persons in the LIC IPO, set to list on the bourses by March 31. However, eligible policyholders will be expected to meet a certain criteria, a source quoted by Hindustan Times said.
The Centre has not yet revealed what percentage of the shares will be up for sale, or what portion of its holding will be diluted through the LIC IPO. “A minimum 5 per cent is certainly expected,” Pandey said, adding that the DHRP will reveal the size of the issue.
“The reduction in expected disinvestment proceeds in the revised estimates (RE) stage of 2021-22 has nothing to do with the IPO size and valuation of LIC as the government’s disinvestment receipts in the current financial year may even cross the RE figure,” said Pandey, as per the report on Livemint.
In a post-Budget meet on February 1, the DIPAM secretary had said that the DHRP for the LIC IPO will be expected within two weeks. In an interview with news agency PTI, he noted that the approval of the insurance regulator is awaited, post which the draft prospectus, detailing the size of the share sale, will be filed.
LIC’s listing is crucial for the government to meet the lowered revenue estimates of Rs 78,000 crore for the current fiscal. Finance minister Nirmala Sitharaman in an exclusive interaction with Rahul Joshi, Group Editor-in-Chief, Network18, said the LIC IPO plan is on track. “LIC IPO plans are going fine. It should happen this year itself. Money from the LIC IPO will come this year itself,” she said.
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