IPO UPDATE: LIC IPO Timeline Soon, Valued at Rs.75,000 Cr The Biggest Ever

LIC IPO Timeline Soon, Valued at Rs.75,000 Cr : The Biggest Ever In India, LIC is a household name. With 2,000 branches, over 100,000 employees, and 286 million policies, the Mumbai-based company has a presence in almost every part of the country. The sheer size of LIC highlights the difficulties in listing what is effectively a black box. Established in 1956, LIC operates under rules established by a unique parliamentary act rather than the law that governs the rest of the country's insurance firms. According to sources, LIC's property holdings were internally valued at around $5.8 billion in March 2020. Comparisons of LIC to its peers are difficult. Because the insurer only releases its balance sheet once a year, there are no publicly available numbers to determine its embedded value, which combines the current value of future profits and the net value of assets. The state, as the only owner of LIC, intends to raise more than Rs.1 lakh crore from the stock offering, more than five times the value raised by financial services giant Paytm's parent One97 Communications in its Offering a few months earlier, which was India's biggest to date. The Department of Investment and Public Asset Management (DIPAM) is the nodal government entity in charge of overseeing the insurer's listing, as well as finalising the embedded value, which is necessary for assigning a value to LIC shares. Milliman Advisors, a global actuarial firm, has been hired to examine LIC's embedded value, which includes the appraisal of the 65-year-old company's old policies. In October, India's finance minister, Nirmala Sitharaman had stated. "All of the elements of keeping valuations in tip-top shape — as well as the activities required to keep them valued correctly — are being completed right now." The listing has a March deadline set by Sitharaman. LIC will compete against India's largest corporations, Reliance Industries Ltd. and Tata Consultancy Services Ltd., if investors agree to the government's $203 billion valuation. The IPO would cover the majority of India's $23.5 billion asset-sale target, which is needed to bridge the country's increasing budget deficit, which is expected to reach 6.8% this year. As LIC's investment book developed over time, it became an investment business. The company's total income climbed to its greatest level in five years towards the end of FY21, owing primarily to investments rather than insurance. Premium income climbed by 6% in FY21, down from 12% the previous year, while investment income increased by 18%, the most since FY17, when it increased by 22 percent. In Fiscal year-21, LIC's net profit climbed by 7% to Rs 2,907 crore, up from Rs 2,713 crore the year before. Premium income increased to Rs 4.03 lakh crore, up from Rs 3.79 lakh crore the previous year. The govt has raised a total of 9,330 crore so far this fiscal year through the sale of minority holdings in PSUs and the sale of Axis Bank's SUUTI (Specified Undertaking of the Unit Trust of India) shareholding. The government is eager to finish the sale of LIC this fiscal year, as its other revenue-generating plans for share sales have met a snag. The state's disinvestment objective of Rs 1.75 lakh crore for FY22 will be dependent on LIC's listing.