LIC IPO: Date for submission of bid to appoint Actuarial Firm extended till December 11

The Department of Investment and Public Asset Management (DIPAM) has extended the last date for the submission of the bid, regarding appointment of Actuarial Firm in relation to minority stake sale of the Government’s equity shareholding in Life Insurance Corporation of India (LICI).

DIPAM is a department under Finance Ministry and is responsible for disinvestments.

The new date for submission of the bid will be December 11 as against previous date of December 8. Similarly, the bid will now be opened on December 14 as against previous date of December 9.

DIPAM floated a Request for Proposal (RFP) to appoint an actuary for determining the Indian Embedded Value (IEV) for LIC. 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. It is one of pre-conditions of the initial public offer (IPO) for LIC and it needs to be determined by an independent actuary.

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.

Earlier this year, Finance Minister Nirmala Sitharaman, in her budget speech proposed sell a part of its holding in LICI by way of Initial Public Offer (IPO). This IPO is critical to meet the Rs 2.10 lakh crore proceed. Out of this target Rs 90,000 crore is to be collected through selling stakes in LIC and IDBI Bank while Rs 1.10 lakh crore is to be mobilised through stake sales, buy back etc of Central Public Sector Enterprises (CPSEs).

Source: The Hindu Business Line