Tag: LIC

  • SC denies interim relief to policyholders seeking stay on LIC IPO shares allotment

    By PTI

    NEW DELHI: The Supreme Court Thursday refused to grant any interim relief and stay the Life Insurance Corporation (LIC) IPO share allotment on a batch of pleas filed by some policyholders.

    A bench of Justices DY Chandrachud, Surya Kant, and PS Narasimha said that the court should be reluctant to grant any interim relief in matters of commercial investments and IPO.

    “Having regard to the facts which have been drawn to the notice of the court, we are of the considered view that no case for the grant of interim relief is made out. We, therefore, decline interim relief,” the bench said.

    It issued notice to the Centre and LIC on a writ petition filed by some policyholders and on an appeal filed against the judgement of the Madras High Court and transferred to itself a plea pending before the Bombay High Court on the issue.

    The apex court directed that replies be filed in eight weeks and rejoinder affidavits be filed thereafter in four weeks as it tagged the present proceedings with the pending matter on the issue of money bill before the larger bench.

    The bench said, “On the aspect of whether any case is made for grant of interim relief, the court must be guided by the well-settled parameters namely -the existence of prima facie case, the balance of convenience and irreparable harm and injury.”

    It said that on the aspect of constitutional issue pertaining to the passage of money bill and on the construction of section 28 of LIC Act, it is inclined to issue the notice as it would be necessary to observe that the submission which has been made on behalf of petitioners would warrant further deliberation.

    The LIC IPO opened on May 4 for retail and other investors and is set to be allotted on Thursday.

    The bench noted that as many as 73 lakh applicants both in India and around the world have subscribed to the LIC’s IPO and the IPO has been oversubscribed six times even in the category which has been especially reserved for the policyholders.

    The top court said that it is necessary to note the percentage dilution of the shareholding of the LIC as a result of the offer for sale is to the extent of 3.5 per cent and 22.13 crore equity shares of a face value of Rs 10 each is being offered at a premium of Rs 939.

    The bench said that the expected receipt into the consolidated fund of India is estimated to be Rs 20,500 crores and the IPO has been oversubscribed by 2.95 times by the general public.

    It noted the submission of Additional Solicitor General N Venkatraman, appearing for the Centre and LIC that section 28 of the LIC Act as originally enacted did not confer any contractual right to the participating policyholders to appropriate 95 per cent of the surplus and the distribution of surplus was in all material time dependent upon notification of the Central government.

    It noted that no statutory guarantee has been issued to the participating shareholders on the distribution of a particular quantum of the surplus and the amendment which has been brought by the Finance Act envisages allotment of shares to shareholders in the LIC.

    During the hearing, Venkatraman further opposed the grant of any interim relief and adverted to various relevant dates having a bearing on the balance of convenience and said that irreparable harm would be caused, if any interim relief is granted.

    He submitted that the bill which eventually resulted in the Finance Act, of 2021 was passed on March 28, 2021, nearly 15 months ago, and the petition under Article 32 which has been instituted before the court was filed on May 9, 2022, which is the date on which the LIC IPO stands closed. He pointed out that the appeal has been filed against the Madras HC verdict dated March 21 on May 2 and similarly is the appeal filed against the Bombay HC order of April 11.

    At the outset, senior advocate Indira Jaising, appearing for the petitioner policyholders, said that the process which has led to the enactment of the amendment to the LIC Act was on the basis that the Finance Act was the money bill and the issue has been referred to the larger bench in 2020. She said as a result of the amendment to section 28 of the LIC Act, 1956, the character of the LIC which is in the nature of a mutual benefit society is sought to be converted to a joint-stock company.

    She added this amounts to an expropriation of the surplus and its distribution in the participating policyholders to the shareholders to whom the shares will be allotted as the result of the IPO.

    Jaising said earlier 95 per cent of surplus went to participating policyholders while five per cent was retained by the Central government, which was just a trustee of the LIC.

    She added the entitlement of the participating policyholders would be altered by the amendment which has been brought about by the Finance Act, 2021 to the provisions of the LIC Act and would be in violation of the provisions of the Constitution.

    The top court noted that by the Finance Act of 2021, an amendment was brought to the LIC Act and on February 13, 2022, a draft red herring prospectus was filed with SEBI for the Initial Public Offering (IPO) of LIC.

    It noted that on April 26, 2022, the red herring prospectus was made available on SEBI’s website, indicating a price band of Rs 902 to Rs 949 per equity share with a discount of Rs 60 for the policyholder.

    On April 27, a price band advertisement was published and the government announced that LIC’s IPO will be opened on May 2for anchor investors and from May 4 to May 9, 2022, for the general public.

  • SC refuses to grant interim relief on pleas seeking stay on LIC IPO share allotment 

    By PTI

    NEW DELHI: The Supreme Court on Thursday refused to grant any interim relief and stay the Life Insurance Corporation (LIC) IPO share allotment on a batch of pleas filed by some policyholders.

    A bench of Justices DY Chandrachud, Surya Kant and PS Narasimha said that the court should be reluctant to grant any interim relief in matters of commercial investments and IPO.

    “We are not inclined to grant any interim relief,” the bench said as it issued notice to the Centre and LIC on the batch of pleas seeking their response within eight weeks.

    The bench said that on the aspect of interim relief the court must be guided by the well-settled principle of prima facie case, the balance of convenience and whether there is any irreparable injury.

    The LIC IPO opened on May 4 for retail and other investors and is set to be allotted on Thursday.

    The bench noted that one of the pleas has challenged the interim order passed by the Bombay High Court and disposed it, saying the writ petition before the high court will be transferred to the apex court.

    The top court tagged the batch of pleas with a pending matter referred to a Constitution Bench on the issue of the passage of the Finance Act, 2021 as a money bill.

  • All You Need to Know About the LIC IPO

    Introduction

    The dates for the launch of the LIC’s IPO have finally been fixed. According to the latest reports, the LIC IPO is slated to open on 4 May 2022 and close on 9May 2022. This news has brought some respite for the investors whose anxiety levels reached sky-high after waiting for the IPO for quite some time now. This IPO was earlier supposed to get launched before 31March 2022. However, the ongoing Russia-Ukraine war led to the delay of the launch date.

    Talking about the LIC IPO, it is expected to be India’s biggest IPO to date, surpassing PayTM’s IPO. The total valuation of this IPO is expected to be around Rs. 21,000 crore and the LIC being India’s largest and world’s fifth-largest life insurance company could create a stir in the Indian stock markets. Continue reading to know everything about the LIC IPO in detail.

    The offer details

    As mentioned, the LIC IPO is expected to be India’s biggest-ever IPO with a valuation of approximately Rs. 21,000 crores. It would surpass the PayTM IPO, which is the current record holder with a valuation of Rs. 18,300 crore. The government of India, which owns a 100% stake in the LIC, is planning to sell a 3.5% stake in the company through this IPO. This is a decline from the earlier estimates of the sale of a 5% stake.

    As per the Draft Red Herring Prospectus (DRHP) filed by the LIC with the Securities and Exchange Board of India (SEBI), the IPO could consist of 31,62,49,885 equity shares with a face value of Rs. 10 per share. Fifty percent of this public issue would be reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Buyers (NIBs), and the remaining 35% for retail investors.

    IPO Timeline

    Although the exact IPO timeline is yet to be announced by the issuing company, the tentative dates for closing and opening of the IPO are out to the public. If everything goes well, the LIC IPO could open on 4May 2022 and close on 9 May 2022. This IPO was earlier scheduled for launch in March 2022, but the ongoing Russia-Ukraine war led to its postponement.

    The tentative IPO allotment date, refund date, and listing date are yet to be announced. The IPO could be priced in the range of Rs. 950 to Rs. 1,000 per equity share.

    Details of the issuing company

    The issuing company of the IPO is the Life Insurance Corporation (LIC) of India. At present, it is India’s largest life insurance company and the fifth-largest globally. As per the DRHP, the embedded value of the LIC is approximately Rs. 5.4 lakh crore. However, going by the government’s estimates of a 3.5% stake worth Rs. 21,000 crore, the company’s valuation could turn out to be more than Rs. 6 lakh crore.

    The LIC has a giant market share of 66.2% in India in terms of new business premium and 74.6% in terms of the number of individual policies issued. It also has a significant global presence with the total Assets Under Management (AUM) worth Rs. 31 lakh crore. LIC is also the largest institutional investor in India with a total investment of approximately Rs. 120 lakh crore.

    The total profits generated by the LIC during the financial years 2019-20, 2020-21, and 2021-22 stood at Rs. 2627.30 crore, Rs. 2710.40 crore, and Rs. 29,74.40 crore, respectively.

    Strengths and Weaknesses

    Let’s evaluate the strengths and weaknesses of the LIC IPO. Below are the strengths of this IPO, which is touted as India’s biggest-ever IPO:

    LIC is the leading life insurance company in India and fifth-largest globally
    The company offers a wide range of life insurance products to cater to varied public needs
    It has a very strong distribution network with 1.34 million agents, 2048 branches, and 174 alternate channels across India
    Largest asset manager in the country with a proven track record
    Below are the risks and weaknesses:

    The COVID-19 pandemic has impacted the business adversely
    Any unfavourable publicity can impact the brand name
    Adverse variation in persistency metrics could impact the revenues
    Rise of several private players in the segment
    Market downswings can highly impact the company’s valuation
    The final words

    The LIC IPO has already created a euphoria among the investors and it could shake up the Indian stock market once it gets launched. If you want to subscribe to the LIC IPO, you can apply for it via a demat account. You can open your demat account for free with ICICIdirect, one of the leading stockbrokers in India. Moreover, you can also choose a brokerage structure as per your requirements. Being a full-service broker, they provide advisory services along with trading facilities.

    This content is distributed by Icici direct. No TNIE Group journalist is involved in the creation of this content.

  • All You Need to Know About the LIC IPO

    Introduction

    The dates for the launch of the LIC’s IPO have finally been fixed. According to the latest reports, the LIC IPO is slated to open on 4 May 2022 and close on 9May 2022. This news has brought some respite for the investors whose anxiety levels reached sky-high after waiting for the IPO for quite some time now. This IPO was earlier supposed to get launched before 31March 2022. However, the ongoing Russia-Ukraine war led to the delay of the launch date.

    Talking about the LIC IPO, it is expected to be India’s biggest IPO to date, surpassing PayTM’s IPO. The total valuation of this IPO is expected to be around Rs. 21,000 crore and the LIC being India’s largest and world’s fifth-largest life insurance company could create a stir in the Indian stock markets. Continue reading to know everything about the LIC IPO in detail.

    The offer details

    As mentioned, the LIC IPO is expected to be India’s biggest-ever IPO with a valuation of approximately Rs. 21,000 crores. It would surpass the PayTM IPO, which is the current record holder with a valuation of Rs. 18,300 crore. The government of India, which owns a 100% stake in the LIC, is planning to sell a 3.5% stake in the company through this IPO. This is a decline from the earlier estimates of the sale of a 5% stake.

    As per the Draft Red Herring Prospectus (DRHP) filed by the LIC with the Securities and Exchange Board of India (SEBI), the IPO could consist of 31,62,49,885 equity shares with a face value of Rs. 10 per share. Fifty percent of this public issue would be reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Buyers (NIBs), and the remaining 35% for retail investors.

    IPO Timeline

    Although the exact IPO timeline is yet to be announced by the issuing company, the tentative dates for closing and opening of the IPO are out to the public. If everything goes well, the LIC IPO could open on 4May 2022 and close on 9 May 2022. This IPO was earlier scheduled for launch in March 2022, but the ongoing Russia-Ukraine war led to its postponement.

    The tentative IPO allotment date, refund date, and listing date are yet to be announced. The IPO could be priced in the range of Rs. 950 to Rs. 1,000 per equity share.

    Details of the issuing company

    The issuing company of the IPO is the Life Insurance Corporation (LIC) of India. At present, it is India’s largest life insurance company and the fifth-largest globally. As per the DRHP, the embedded value of the LIC is approximately Rs. 5.4 lakh crore. However, going by the government’s estimates of a 3.5% stake worth Rs. 21,000 crore, the company’s valuation could turn out to be more than Rs. 6 lakh crore.

    The LIC has a giant market share of 66.2% in India in terms of new business premium and 74.6% in terms of the number of individual policies issued. It also has a significant global presence with the total Assets Under Management (AUM) worth Rs. 31 lakh crore. LIC is also the largest institutional investor in India with a total investment of approximately Rs. 120 lakh crore.

    The total profits generated by the LIC during the financial years 2019-20, 2020-21, and 2021-22 stood at Rs. 2627.30 crore, Rs. 2710.40 crore, and Rs. 29,74.40 crore, respectively.

    Strengths and Weaknesses

    Let’s evaluate the strengths and weaknesses of the LIC IPO. Below are the strengths of this IPO, which is touted as India’s biggest-ever IPO:

    LIC is the leading life insurance company in India and fifth-largest globally
    The company offers a wide range of life insurance products to cater to varied public needs
    It has a very strong distribution network with 1.34 million agents, 2048 branches, and 174 alternate channels across India
    Largest asset manager in the country with a proven track record
    Below are the risks and weaknesses:

    The COVID-19 pandemic has impacted the business adversely
    Any unfavourable publicity can impact the brand name
    Adverse variation in persistency metrics could impact the revenues
    Rise of several private players in the segment
    Market downswings can highly impact the company’s valuation
    The final words

    The LIC IPO has already created a euphoria among the investors and it could shake up the Indian stock market once it gets launched. If you want to subscribe to the LIC IPO, you can apply for it via a demat account. You can open your demat account for free with ICICIdirect, one of the leading stockbrokers in India. Moreover, you can also choose a brokerage structure as per your requirements. Being a full-service broker, they provide advisory services along with trading facilities.

    This content is distributed by Icici direct. No TNIE Group journalist is involved in the creation of this content.

    Introduction

    The dates for the launch of the LIC’s IPO have finally been fixed. According to the latest reports, the LIC IPO is slated to open on 4 May 2022 and close on 9May 2022. This news has brought some respite for the investors whose anxiety levels reached sky-high after waiting for the IPO for quite some time now. This IPO was earlier supposed to get launched before 31March 2022. However, the ongoing Russia-Ukraine war led to the delay of the launch date.

    Talking about the LIC IPO, it is expected to be India’s biggest IPO to date, surpassing PayTM’s IPO. The total valuation of this IPO is expected to be around Rs. 21,000 crore and the LIC being India’s largest and world’s fifth-largest life insurance company could create a stir in the Indian stock markets. Continue reading to know everything about the LIC IPO in detail.googletag.cmd.push(function() {googletag.display(‘div-gpt-ad-8052921-2’); });

    The offer details

    As mentioned, the LIC IPO is expected to be India’s biggest-ever IPO with a valuation of approximately Rs. 21,000 crores. It would surpass the PayTM IPO, which is the current record holder with a valuation of Rs. 18,300 crore. The government of India, which owns a 100% stake in the LIC, is planning to sell a 3.5% stake in the company through this IPO. This is a decline from the earlier estimates of the sale of a 5% stake.

    As per the Draft Red Herring Prospectus (DRHP) filed by the LIC with the Securities and Exchange Board of India (SEBI), the IPO could consist of 31,62,49,885 equity shares with a face value of Rs. 10 per share. Fifty percent of this public issue would be reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Buyers (NIBs), and the remaining 35% for retail investors.

    IPO Timeline

    Although the exact IPO timeline is yet to be announced by the issuing company, the tentative dates for closing and opening of the IPO are out to the public. If everything goes well, the LIC IPO could open on 4May 2022 and close on 9 May 2022. This IPO was earlier scheduled for launch in March 2022, but the ongoing Russia-Ukraine war led to its postponement.

    The tentative IPO allotment date, refund date, and listing date are yet to be announced. The IPO could be priced in the range of Rs. 950 to Rs. 1,000 per equity share.

    Details of the issuing company

    The issuing company of the IPO is the Life Insurance Corporation (LIC) of India. At present, it is India’s largest life insurance company and the fifth-largest globally. As per the DRHP, the embedded value of the LIC is approximately Rs. 5.4 lakh crore. However, going by the government’s estimates of a 3.5% stake worth Rs. 21,000 crore, the company’s valuation could turn out to be more than Rs. 6 lakh crore.

    The LIC has a giant market share of 66.2% in India in terms of new business premium and 74.6% in terms of the number of individual policies issued. It also has a significant global presence with the total Assets Under Management (AUM) worth Rs. 31 lakh crore. LIC is also the largest institutional investor in India with a total investment of approximately Rs. 120 lakh crore.

    The total profits generated by the LIC during the financial years 2019-20, 2020-21, and 2021-22 stood at Rs. 2627.30 crore, Rs. 2710.40 crore, and Rs. 29,74.40 crore, respectively.

    Strengths and Weaknesses

    Let’s evaluate the strengths and weaknesses of the LIC IPO. Below are the strengths of this IPO, which is touted as India’s biggest-ever IPO:

    LIC is the leading life insurance company in India and fifth-largest globally
    The company offers a wide range of life insurance products to cater to varied public needs
    It has a very strong distribution network with 1.34 million agents, 2048 branches, and 174 alternate channels across India
    Largest asset manager in the country with a proven track record
    Below are the risks and weaknesses:

    The COVID-19 pandemic has impacted the business adversely
    Any unfavourable publicity can impact the brand name
    Adverse variation in persistency metrics could impact the revenues
    Rise of several private players in the segment
    Market downswings can highly impact the company’s valuation
    The final words

    The LIC IPO has already created a euphoria among the investors and it could shake up the Indian stock market once it gets launched. If you want to subscribe to the LIC IPO, you can apply for it via a demat account. You can open your demat account for free with ICICIdirect, one of the leading stockbrokers in India. Moreover, you can also choose a brokerage structure as per your requirements. Being a full-service broker, they provide advisory services along with trading facilities.

    This content is distributed by Icici direct. No TNIE Group journalist is involved in the creation of this content.

  • Union government mulls permitting foreign investment in LIC

    By PTI

    NEW DELHI: The government is mulling allowing foreign direct investment (FDI) in the country’s largest insurer LIC, a move which would help overseas investors take part in the company’s proposed mega IPO, sources said.

    The proposal is under discussion between the Department of Financial Services and the Department of Investment and Public Asset Management (DIPAM).

    “Discussions have been going on for the proposal for the last few weeks. It would also go for inter-ministerial discussions and would also require Cabinet nod,” a source said.

    According to the current FDI policy, 74 per cent foreign investment is permitted under the automatic route in the insurance sector.

    However, these rules do not apply to the Life Insurance Corporation of India (LIC), which is administered through a separate LIC Act.

    As per Sebi rules, both FPI and FDI are permitted under public offer.

    However, sources said since LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.

    The Cabinet had in July approved the initial public offering (IPO) of LIC.

    The DIPAM had in January appointed actuarial firm Milliman Advisors LLP India to assess the embedded value of LIC ahead of the IPO, which is touted to be the biggest public issue in Indian corporate history.

    The government expects to come out with the LIC IPO by the end of the current fiscal.

    Up to 10 per cent of the issue size would be reserved for policyholders.

    The government has already brought in the required legislative amendments in the LIC Act for the proposed IPO.

    Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.

    As many as 16 merchant bankers are in the race to manage the mega initial public offering.

    These bankers will be making a presentation before DIPAM during the week.

    Seven international bankers, including BNP Paribas, Citigroup Global Markets India and DSP Merrill Lynch Ltd (now known as BofA Securities), will make presentations.

    The listing of LIC will be crucial for the government to meet its disinvestment target.

    The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sales and privatisation.

    Of the Rs 1.75 lakh crore, Rs 1 lakh crore is to come from selling the government’s stakes in public sector banks and financial institutions.

    The remaining Rs 75,000 crore would come as CPSE disinvestment receipts.

  • Cabinet clears Life Insurance Corporation IPO, issue by March 2022

    By Express News Service
    NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) has given its in-principle approval for the listing of Life Insurance Corporation of India (LIC)’s shares on stock exchanges, an official in the Department of Financial Services, Ministry of Finance, told TNIE.

    The initial public offering (IPO) of the state-owned life insurer is part of the government’s efforts to raise Rs 1.75 lakh crore through disinvestment in the current financial year. Sources said all efforts are being made to ensure the LIC IPO is done within the current financial year, which ends in March 2022. 

    The government, which holds 100% equity holding in LIC, is planning to sell a portion of its stake in the process. Finance Minister Nirmala Sitharaman in her Budget speech had brought in necessary amendments in the Life Insurance Act to pave the way for LIC IPO.

    Deloitte and SBI Capital have been appointed pre-IPO advisors. According to sources, they have prepared a full activity chart for LIC, the milestones, what they have to do with accounts, etc.