Exclusive: LIC IPO: DIPAM Secretary Tuhin Kant Pandey speaks to Anil Singhvi; reveals timing, what retail investors can expect from issue?

State-run Life Insurance Corporation of India (LIC) has filed a Draft Red Herring Prospectus (DRHP) for the initial public offer (IPO) with market regulator Securities Exchange Board of India (Sebi).

When will LIC's IPO come? How is the valuation of LIC's IPO? What will retail investors and policyholders get in IPO? With all these questions Zee Business Managing Director Anil Singhvi talked with Disinvestment Secretary Tuhin Kant Pandey in an exclusive interview where Pandey said that LIC has filed DRPH and IPO will hit the market before March.  Edited version:

When will LIC's IPO come?

Disinvestment Secretary said IPO will hit the market before March. The insurance company has filed DRHP for IPO with market regulator Sebi. Market outreach is in process and the company will also think about the documents from the process of DRHP. RHP will come at the end then prospectors will be final which includes price band and all.

What will be the range or valuation of LIC's IPO?

Right now, we are talking about shares. But an important metric in an insurance company is 'embedded value' which is a unique concept for insurance because insurance is a long-term business in which expenses have to be paid first and returns come later. Hence its embedded value is derived from its actual value.

The embedded value is very important for valuation.

Many people got confused, after your weekend tweet, the valuation of LIC is 5 - 5.25 lakh crores. What do you say about it?

Embedded value and valuation are two different things. The embedded value is only for the insurance company and all the embedded value and market caps of all the listed companies are available in the public domain.

The general market is being estimated that 10 lakh crores to 12 lakh crores should be the valuation of LIC's IPOs. Is this range reasonable or too far from the actual valuation?  

I would not like to make any speculations about it yet because DRPH has filed yesterday. LIC has a unique business and market share, also there are many possibilities, and investors' feedback will depend on all these possibilities. And that is why it is difficult for me to limit the range of the valuation for now.

It was anticipated that 10% IPO would come, why only 5%? Is there any specific reason? Or the mood of the market is slightly disturbed globally, due to which the size of the IPO has been kept a little smaller?

SEBI's rule is that if the market cap is more than 1 lakh crore, then you can also bring it in 5%.
The second thing is the size of 5% may vary slightly as it is at the DRPH stage, also it depends on the demand. But since this is a huge issue, considering its possibilities, it has been fixed at 5%.

Since this is one of the biggest IPO, What kind of response LIC is getting from global investors and domestic investors?

It's getting good responses because it is a much-awaited IPO. Also, LIC is a very big insurance corporation in the Indian insurance market and a lot of new and detailed information has been passed on to the investors through DRPH's document. I hope they are attracted.

What will retail investors and policyholders get in IPO?
The policyholder will have a reservation. They can become partners as retail investors. Apart from that, they have also been given space in a separate window of policyholders.

Watch Full Interview Here

LIC के IPO पर सबसे बड़ा INTERVIEW

विनिवेश सचिव तुहिन कांत पांडे के साथ EXCLUSIVE INTERVIEW

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रिटेल इन्वेस्टर्स और पॉलिसी होल्डर्स को IPO में क्या मिलेगा?#LICIPO | @AnilSinghvi_ | @SecyDIPAM | #TuhinKantaPandey pic.twitter.com/aAJufgwXaO

— Zee Business (@ZeeBusiness) February 14, 2022