LIC IPO: RFP soon to appoint actuary to determine shareholder value

The Department of Investment and Public Asset Management (DIPAM) will soon issue a Request for Proposal (RFP) to appoint an actuary for determining the Indian Embedded Value (IEV) for Life Insurance Corporation of India.

The IEV is a measure of the consolidated value of shareholders’ interest in the life insurance business within the meaning of the Insurance Act, 1938, and applicable IRDAI regulations. “IEV is one of pre-condition of the IPO for LIC and that needs to be determined by an independent actuary,” a top Finance Ministry official told BusinessLine.

The official also said this is one of the processes being finalised along with other requirements for IPO The official did not rule out the possibility of the IPO being shifted to the next fiscal.

Shareholders’ interest

IRDAI regulations require an applicant company to file the ‘Embedded Value’ before an IPO. The valuation report needs to be prepared by an independent actuary and peer reviewed by another professional.

No extension for BPCL bid

The official also hinted that there may not be any further extension for submitting the Expression of Interest (EoI) to buy a controlling stake in Bharat Petroluem Corporation Ltd (BPCL).

“I don’t see further extension for submitting the EoI to buy Government’s stake in BPCL,” the official said. The government plans to sell all its nearly 53 per cent stake in BPCL (except BPCL’s 61.65 per cent stake in Numaligarh Refinery). The fourth extension ends on November 16.

The official said even the buyer for strategic disinvestment in Numaligarh has been identified and it is one of the Central Public Sector Enterprise, still, there is no plan to complete the process independently or before BPCL. “We do not want to create disruptions here as BPCL already initiated some project in the refinery,” he said while emphasising that there will be co-ordinated effort.

Overall strategic disinvestment

The official said the strategic disinvestment plan is back on track. “There have been delay on account of the pandemic, but now that delay is not expected to be prolonged,” he said. Strategic sale of Central Electronics Ltd and two plants (Salem and Bhadrawati) are in an advanced stage.

He also said the process of issuing EoIs for strategic sale of Bharat Earth Movers Ltd (BEML), Neelachal Ispat Nigam Ltd (NINL), CONCOR, Shipping Corporation and Pawan Hans is on and expected to be released soon.

Source: The Hindu Business Line