LIC cleans books of bad loans as it gets IPO-ready

MUMBAI: The Life Insurance Corporation of India (LIC) is cleaning up its books ahead of its initial public offering (IPO) later this year. The corporation, which brought down its net non-performing assets to 0.05% as of March 2021 from 0.79% as of March 2020, is now selling its fully provided NPAs.

As part of its IPO plans, the corporation plans to audit its half-yearly accounts for the period ended September 2021. Traditionally, the corporation has been publishing only full-year accounts. The half-yearly accounts are likely to include the embedded value — a valuation method unique to insurance companies that includes the net present value of future earnings from policies. LIC has appointed Milliman as the actuary for the process and EY as the advisers.

The corporation is simultaneously engaged in the recast of its capital base that will enable the distribution of shareholding over a much wider base. The government is determined to complete the public issue during the current fiscal and, with that in mind, is working toward ensuring that the corporation’s books are IPO-ready as of end-September.

The ministry is putting the remaining legislative changes in place. LIC, too, is working overtime to put in place policies to comply with Sebi regulations for listed companies.