How much was the valuation of LIC last year, you know

Who is the most valuable company of the government, do you know? If you don’t know, we will tell. In today’s date, the name of Life Insurance Corporation of India is coming to the fore as the most valuable company of the government. Earlier this place was occupied by SBI.

Revealed from DRHP
The government on Sunday filed a draft document for LIC’s IPO with market regulator SEBI. International firm Milliman Advisors has estimated the embedded value of LIC at around Rs 5.4 lakh crore as of 30 September 2021, according to the draft red herring prospectus. So far, the market capitalization of SBI (State Bank of India), which is considered the most valuable company of the government, is currently about five and a half lakh crores.

To be sold as OFS
LIC IPO is in the form of Outright Offer for Sale (OFS) by Government of India. According to Tuhin Kant Pandey, DIPAM Secretary in the Union Finance Ministry, as on March 31, 2021, LIC had 66 per cent market share in the new premium business with 283 crore policies and 13.5 lakh agents. However, the government did not disclose the market valuation of LIC in DRHP or the discounts given to policyholders or LIC employees in the public offering.

reservation in shares
A portion of the IPO will be reserved for anchor investors. Also, up to 10 percent of LIC’s IPO issue will be reserved for policyholders. LIC’s IPO assumes significance for the government amid the projection of a shortfall in the government’s disinvestment target by Rs 78,000 crore for the current fiscal. The government has so far raised around Rs 12,000 crore through the privatization of Air India and stake sale in other PSUs.

According to Crisil’s report, LIC is the third largest company in the world in terms of life insurance premiums.