Life Insurance Corporation(LIC) of India, on February 13, filed its IPO draft prospectus with SEBI. The Government is planning to launch LIC IPO next month as a part of its mega disinvestment plan. This will be India’s largest-ever public listing.
As per the market sources with the value of Rs 12.6 billion- Rs 15 billion, LIC’s IPO is targeting anything between Rs 63,000 crore to Rs 75,000 crore as the Government is divesting only 5 percent. And with its listing, the company will quickly join the ranks with RIL and Tata Consultancy Services in terms of its market cap.
According to analysts with a 2.6x market cap to embedded value, LIC will become the second-largest company by total market cap.
On September 1, 1956, the LIC was formed by nationalizing and merging 245 private life insurance companies in India with an initial capital infusion of Rs 5 crore. It was a life insurance company until the market opened in 2000. The LIC is not only the dominant Indian Insurance company; it is a global giant as LIC is the fifth largest life insurance company globally.
LIC’s unclaimed money:
According to the reports, LIC has around Rs 21,000 crore worth of unclaimed money. The main reason is the matured policies for which the investors haven’t claimed the money. As a result, they are almost 90 percent of the total unclaimed money. The amount is so huge that it exceeds the budget of the Ministry of Civil Aviation, Ministry of Electronics and Information Technology, Ministry of External Affairs, and Ministry of Environment, Forests, and Climate Change.
According to the Government rules, an unclaimed amount for more than ten years has to be transferred to the Senior Citizen’s Welfare Fund.
LIC Holds Roadshows to woo Global Investors:
On Monday, the LIC held a roadshow to attract global investors to participate in the biggest IPO. Capital Group, Aberdeen Asset Management, California University Endowment, Abu Dhabi Investment Authority and Govt of Singapore Investment Corp are some investors who participated in it.