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Mumbai, Feb 21
Life Insurance Corporation of India is preparing for its mega initial public offering, which it hopes to launch this fiscal, its Chairman, M.R. Kumar, said on Monday.
“We are watching the geopolitical developments closely, but are keen on listing in March,” he told presspersons.
His comments come amidst increasing global concerns over tensions between Russia and Ukraine that has also spooked the markets.
The valuation process is currently on, Kumar said, adding that policyholders have shown a lot of interest in the IPO. Nealry 70 lakh permanent account numbers have been linked to life insurance policies to enable policyholders to participate in the IPO.
IDBI Bank
Meanwhile, the life insurer also wants to retain some stake in IDBI Bank, where the government is expected to commence the stake sale process soon.
“It is up to the government and DIPAM to kick off the exercise. Since it was a strategic partnership, we may continue with stake for our bancassurance,” Kumar said. IDBI Bank has been the largest contributor to the insurer’s banca channel and going forward will help it grow the channel further. He, however, did not quantify the amount of stake that LIC would like to hold in IDBI Bank.
While the Centre holds 45.48 per cent stake in IDBI Bank, LIC owns 49.24 per cent stake in the lender as of December 31, 2021.
Kumar said the stake sale in IDBI Bank would also determine the future for the housing finance business.
According to LIC’s draft red herring prospectus, either IDBI Bank or LIC Housing Finance will have to stop conducting housing finance activities in order to meet regulatory requirements.
“The Reserve Bank of India has given a five-year time period till November 2023. We will have to take a call on whether we want LIC Housing Finance to source the business from IDBI Bank, which will be allowed,” Kumar said.
The other scenario would be the disinvestment of IDBI Bank, on which DIPAM may have some announcement soon, he said.
Surplus
On questions on the change in surplus distribution, Kumar stressed that there will be no shortchanging of anyone and policyholders’ interests will be taken care of. “The time has come to align ourselves with the industry,” he said.
Kumar also stressed that the insurer is well capitalised and does not need additional capital.
The Centre is set to sell 5 per cent stake in LIC and the insurer has recently filed its DRHP with SEBI.
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