Tag: business news

SEBI Chairman: Madhabi Puri Buch appointed as first woman chief of Sebi | India Business News

Post author By Z+ Insurance
Post date February 28, 2022
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NEW DELHI: The government on Monday appointed Madhabi Puri Buch as the new Sebi chairman with an initial term of three years, making her the first woman to lead a financial regulatory body in the country.
Buch, a former executive of ICICI Bank, was a member of Sebi for nearly five years but was not given an extension when her term ended last October. Her return marks a return of a private sector professional at the market regulator, which was under the charge of civil servants with GN Bajpai, a former LIC chairman, being the sole exception.
It also signals that the Ajay Tyagi, who was eligible for a fresh term for a little under two years, may have been denied an extension or reappointment due to the recent revelations regarding National Stock Exchange, where market regulator is seen to have not used all the instruments available at its disposal.
While Buch has herself been a Sebi member and RBI has had several women deputy governors, none of them had gone on to head the agencies, including the insurance or pensions regulators.
The former banker grew up in Delhi, finishing high school at the Convent of Jesus and Mary, before earning a bachelor’s degree from St Stephen’s College. She then headed to IIM Ahmedabad and joined ICICI as a project finance analyst in Mumbai.
She spent a few years away from ICICI, as a lecturer in the UK and at ORG-MARG before returning to ICICI Bank in 1997, where she took up multiple assignments, including being the head of their mortgage arm and was the executive director for consumer and corporate banking before being the CEO of ICICI Securities.
In 2011, she moved Singapore and was subsequently independent director on the boards of several companies until her appointment as a whole-time member of Sebi in April 2017.
In her new role, her immediate challenge will be to restore the trust in Indian markets, which has been dented due to the controversy at NSE, the country’s largest exchange, while ensuring a smooth sailing for Life Insurance Corporation of India’s mega initial public offer, estimated to be around Rs 65,000 crore or more.
Besides, she will have to carry forward the reforms, with special focus on retail investors.

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Tags ajay tyagi sebi, ajay tyagi successor, business news, madhabi puri buch, sebi, sebi chairperson, Securities and Exchange Board of India

Delhi News

fdi: Ahead of IPO, govt allows 20% FDI via automatic route in LIC

Post author By Z+ Insurance
Post date February 27, 2022
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NEW DELHI: Ahead of the planned public issue, the government on Saturday allowed 20% foreign direct investment (FDI) in Life Insurance Corporation via the automatic route.
The move also signals that the government is keen to pursue the mega initial public offer of the insurance behemoth despite the choppy markets in the wake of Russia’s invasion of Ukraine.
While the government allows 74% FDI in the insurance sector, overseas investment was not allowed in LIC, which is governed by a special statute. Now the government has sought to bring parity in terms of allowing foreign flows before the IPO but has aligned the rules for those applicable to public sector banks.
The government is keen to complete the listing of LIC by the end of March as part of its efforts to bolster revenues and close the year with a fiscal deficit of 6.9% of GDP. Though the recent developments in Ukraine have brought in some uncertainty about the timing, the government and bankers for the issue are going ahead with the roadshows.
While a large portion of the issue is proposed to be earmarked for retail investors and policyholders, overseas investors too are expected to invest large amounts in LIC.
Government sources said that the Union Cabinet which met on Saturday also cleared a few other changes to the FDI regime as part of the efforts to simplify the mechanism and make it attractive for overseas investors to pump in money into the country.
The details of the amended regime will be notified over the next few days. The changes are meant “to provide greater clarity and updated, consistent and easily comprehensible FDI framework”, an official source said.
“The measures taken by the government with FDI policy reforms, investment facilitation and ease of doing business, have contributed to India attracting record FDI inflows in the recent past,” an official said.
FDI inflows hit a record high of $74.4 billion during the last financial year as mega deals involving Reliance Jio pushed up inflows. Latest data released by the commerce and industry ministry showed a 16% decline in FDI flows during April-December 2021 and were estimated at $43 billion, compared with $51.5 billion during the corresponding period of the previous year.

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Tags business news, FDI, Lic, reliance jio, Ukraine, union cabinet

Delhi News

Govt clears up to 20% FDI in LIC ahead of mega IPO

Post author By Z+ Insurance
Post date February 26, 2022
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The government on Saturday cleared an amendment to allow up to 20 foreign direct investment (FDI) under the “automatic route” in Life Insurance Corporation. This comes ahead of the proposed initial public offer of LIC, which is expected to be the largest in the Indian capital markets so far.

The government expects to mobilise Rs 63,000-66,000 crore from the proposed share sale to meet its disinvestment target of Rs 78,000 crore for FY22, as per industry estimates. While LIC is yet to announce the IPO price, market estimates are that the IPO is likely to be Rs 2,000-2,100 per share.

The existing FDI Policy did not prescribe any specific provision for foreign investment in LIC, which is established under the LIC Act, 1956. The FDI ceiling for LIC has now been made at par with that of the public sector banks. While the government had last year raised the FDI limit in the insurance sector to 74 per cent from 49 per cent, it did not cover LIC that is covered by a specific legislation.

“Since as per the present FDI Policy, the FDI ceiling for public sector banks is 20% on government approval route, it has been decided to allow foreign investment up to 20% for LIC and such other bodies corporate. Further, in order to expedite the capital raising process, such FDI has been kept on the automatic route, as is in the case of rest of the insurance sector,” a government source said.

Foreign investors may be desirous of participating in the IPO of LIC, and this change would facilitate FDI in LIC and such other bodies corporate, for which government may have a requirement for disinvestment purposes, sources said.

On Friday, the National Stock Exchange decided to relax the eligibility criteria of Nifty equity indices and for replacement of stocks in various indices, reducing the minimum listing history of constituents from three months to one calendar month, effective from March 31. This relaxation is expected to pave the way for the inclusion of LIC, which plans to list its shares in March, in the benchmark Nifty 50 Index. Since many passive funds allocate investments to indices and index stocks, the move, along with FDI permission, would enable large inflows in the LIC IPO.

Once the Sebi approves the issue, the IPO is likely to open for subscription in the second week of March and trading will commence by the third week, industry sources said. The government is going ahead with the listing of the latter’s shares, despite increased volatility in the markets amid increasing global concerns.

Sources said the government expects this move, along with other simplifications in FDI policy, to “make India an attractive investment destination”. FDI inflows into India rose to $81.97 billion in 2020-21, from $ 74.39 billion in 2019-20. “The FDI policy reform will further enhance Ease of Doing Business in the country, leading to larger FDI inflows and thereby contributing to growth of investment, income and employment,” they said.

FDI in currently permitted sectors is allowed up to the limit indicated against each sector/activity subject to applicable laws/regulations. “Insurance” is a permitted sector under FDI policy rules, however, it currently lists only Insurance Company and “intermediaries or insurance intermediaries” under the “Insurance” sector. LIC being a statutory corporation, is not covered under either of these.

Further, no limit is prescribed presently for foreign investment in LIC under the LIC Act, 1956; the Insurance Act, 1938; the Insurance Regulatory and Development Authority Act, 1999 or regulations made under the respective Acts. Therefore, this amendment has been made to specifically allow 20% FDI in LIC.

In an interview with The Indian Express earlier this month, the Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said that 20 per cent FDI should be sufficient considering that existing regulations and the requirements.

“…because LIC is not an insurance company, so insurance laws strictly does not apply to it, except for some of the provisions of insurance, which are indicated in the LIC act itself. We have to retain 51 per cent by law. We cannot go below that. And even if we go for an IPO, we will be able to dilute only up to 25 per cent within the first five years. We can not go more than this as per the law. And then we have the law that no single person can own than 5 per cent. So 20% (FDI) is more than enough for us, if we go for that route,” he had said.

As of September 2021, LIC policyholders had total investments of Rs 39,49,516.37 crore on a standalone basis. This is more than 3.3 times higher than total assets under management (AUM) of all private life insurers in India and approximately 16.2 times more than the AUM of the second-largest player in the Indian life insurance industry in terms of AUM.

LIC held stocks worth a “carrying value” of Rs 9,79,843 crore (close to $130 billion), or 24.77 per cent of its total investments, as on September 30, 2021. The market valuation is LIC is expected to be more than Rs 10 lakh crore, putting it at par with top notch companies such as Reliance Industries and TCS.

The initial public offer of up to 31.62 crore equity shares comprises the net offer, employee reservation portion, and policyholder reservation portion. The IPO works out to 5 per cent of the total capital of 632.49 crore shares, with the government retaining the remaining 95 per cent.

A portion of shares, not exceeding 5 per cent of the offer, will be reserved for employees. Another portion not exceeding 10 per cent, will be reserved for eligible policyholders. Policyholders and employees are likely to get shares at a discount.

A minimum 35 per cent of the issue will be reserved for retail investors. The corporation may allocate up to 60 per cent of the QIB (qualified institutional buyers) portion to anchor investors on a discretionary basis. One-third of the anchor investor portion will be reserved for domestic mutual funds.

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Tags business news, FDI, FDI Policy, Indian economy, Indian express news, Lic, LIC Act, life insurance corporation of india

Delhi News

Cabinet approves up to 20% FDI in behemoth insurer LIC: Source

Post author By Z+ Insurance
Post date February 26, 2022
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NEW DELHI: The Cabinet approved on Saturday a policy amendment allowing foreign direct investment of up to 20% in Life Insurance Corp of India (LIC), a government source said, a change aimed at easing the listing of the state-run insurer.
India’s biggest insurance company plans to float a stake of 5% to raise about $8 billion next month for the south Asian nation’s largest initial public offering (IPO) by far.

The amendment would allow foreign direct investors to buy up to 20% of LIC’s shares through an automatic route, said the government source, who spoke on condition of anonymity after the cabinet meeting.
Under current rules, foreign investment is not allowed in the LIC, governed by the special parliament act, while 74% foreign direct investment is allowed in other private insurance companies.
The amendment would allow the government to raise the foreign direct investment limit in the LIC up to 20%, on par with the rule for state-run banks, the government source said.
The cabinet decision comes amid growing fears among some investors that the government could defer public listing of the LIC due to increasing volatility in the market after Russia‘s invasion of Ukraine.
Government officials, have however, said that there was no plan to defer the listing of the insurance company – critical for plans to raise funds for budgeted spending.
In the IPO, the firm will also earmark a certain percentage of shares for policyholders, not exceeding 10% of the offer size, while the portion reserved for employees will not be more than 5% of post-offer equity share capital, according to the IPO filing. LIC employed 114,498 people as of end-March, 2021.
LIC, which was formed six decades ago when India’s insurance sector was nationalised, straddles the business in the country, with more than 280 million policies and over 60% of the insurance segment.

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Tags business news, FDI, Lic, LIC FDI, Russia, Ukraine

Delhi News

NSE eases rules for Nifty inclusion, may enable entry of LIC

Post author By Z+ Insurance
Post date February 26, 2022
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The Index Maintenance Sub-Committee – Equity (IMSC) of NSE Indices Ltd has decided to relax the eligibility criteria of Nifty equity indices and for replacement of stocks in various indices, as part of its periodic review. It has reduced the minimum listing history of constituents from three months to one calendar month.

The changes will be effective from March 31. Market sources say the relaxation will pave the way for the inclusion of Life Insurance Corporation (LIC), which plans to list its shares in March, in the benchmark Nifty 50 Index.

The government and LIC are going ahead with the listing of the latter’s shares, despite high volatility in the markets amid increasing global concerns over Russia’s invasion of Ukraine.

Investment banking sources said once the Sebi approves the issue, the IPO will open for subscription in the second week of March and trading will commence by the third week.

The government expects to mobilise Rs 63,000-66,000 crore from the proposed offer for sale (OFS) to meet its disinvestment target of Rs 78,000 crore for FY22. While LIC is yet to announce the IPO price, market estimates are that the IPO is likely to be Rs 2,000-2,100 per share.

Explained

Eye on Nifty 50 index

From March 31, minimum listing history of a constituent on NSE will be down to one month. This is likely to make LIC’s listing on Nifty 50 — NSE’s benchmark index — smoother.

An Edelweiss Alternative Research report said, “Despite being a lower float name, there is a medium to high probability of the stock (LIC) getting fast entry in the MSCI Index. As in the case of bigger issuances, the index provider does not compulsorily require minimum length of trading requirement or foreign inclusion factor (FIF) of 0.15.”

The key aspect to be kept on radar will be the issue size and the final listing market capitalisation, as anything below Rs 10.7 lakh crore valuation at listing can make the inclusion difficult. “Also, interim market size segment cut off will be an important level to watch out for,” the report said.

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Tags BSE Sensex. NSE Nifty, business news, current affairs, indian express, Indian express business news, Indian express news, Life insurance corporation, national stock exchange, nse

Delhi News

There’s buzz, interest in market for LIC IPO: Nirmala Sitharaman

Post author By Z+ Insurance
Post date February 22, 2022
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NEW DELHI: Amidst the ongoing buzz around Life Insurance Corporation of India‘s (LIC) market debut, the finance minister on Tuesday assured that the government will go ahead with it.
Addressing a post-budget outreach press conference, the finance minister said that there’s a lot of buzz and interest in stock market for India’s biggest initial public offering (IPO).
The finance minister also expressed concern over the persisting market conditions and said that the government is equally thinking of it for the LIC IPO.

Sitharaman’s statement comes at a time when prospective investors are supposedly seeking assurances over government control of the insurer, news agency Reuters had reported quoting sources.
In virtual roadshows for the biggest ever public listing, LIC management and the IPO bankers have been peppered with questions about the insurer’s past investments and their quality, the agency had said.

On soaring crude prices, the finance minister said that it is a challenge and was discussed at meeting on financial stability with heads of banks, NBFCs and financial institutions.

She further assured that the government is watching Russia-Ukraine crisis closely and the impact is yet to be felt on trade.
“We are careful that our exporters do not suffer,” Sitharaman said.
(With inputs from agencies)

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Tags business news, LIC IPO, lic ipo news, life insurance corporation of india, nirmala sitharaman, russia-ukraine crisis, sitharaman on lic ipo

Delhi News

One in three IPOs this fiscal trading below its issue price

Post author By Z+ Insurance
Post date February 21, 2022
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AT LEAST one in three initial public offerings (IPOs) this financial year since is currently trading below its issue offer price. In the past 10-plus months since April 1, 2021, in FY 2021-22, as many as 50 companies mopped up a record Rs 1,11,156 crore; state-owned Life Insurance Corporation too expects to mobilise over Rs 50,000 crore through an IPO this year itself.

During the same 10-month period, the benchmark sensitive index (Sensex) of the Bombay Stock Exchange gained over 16.5 per cent. BSE mid-cap and small-cap indices rose 18 per cent and 34 per cent, respectively during the period.

If investors in 18 companies out of 50 listed are sitting on losses, several others have generated only marginal gains. Of the 32 trading at a premium as on February 18, a dozen generated capital gains of up to 15 per cent which includes seven that have risen by up to 10 per cent, according to data compiled by The Indian Express.

Amongst the losers, investors in CarTrade Tech and One97 Communications (Paytm) suffered the maximum value erosion with shares trading over 60 per cent below their issue price. Even Zomato witnessed a sharp 36 per cent correction over the last one month; it is currently trading at Rs 86, which is 13 per cent over its issue price. FSN E-commerce (Nykaa) saw its share price fall from Rs 2,071 on January 17 this year to Rs 1,397 on February 18. The issue was priced at Rs 1,125. Data Patterns dropped from Rs 815 to Rs 652.20 during the same period.

The sharp fall must be seen in the context of a larger selling pressure in tech stocks. While the BSE Tech fell 8 per cent against the Sensex fall of 0.7 per cent since December 31, the Nasdaq has lost 13.4 per cent compared with the 6 per cent in Dow Jones.

Half-a-dozen IPOs are quoting at a premium of over 100 per cent and another six have returned between 50 per cent and 100 per cent capital gains since their listing.

The CEO of an asset management company said investors should be careful when there are many IPOs. “It is always seen that when the markets are on a high, IPOs tend to bunch up as companies hope to command a high premium. In such cases, promoters don’t leave much on the table for investors; they make the most,” said the CEO, who did not wish to be named.

The CEO further raised concern over the huge valuation demanded by new age technology companies and investor appetite. “If these companies could not make profit in lockdown when everything turned online, I am not comfortable with them when the economy has opened up,” he said.

The top ten gainers appreciated between 58 per cent and 273 per cent with Paras Defence and Space Tech topping the list with a gain of 273 per cent; its shares jumped from Rs 175 to Rs 654 after listing October 1, 2021.

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The top loser is CarTrade Tech which came out with an IPO at Rs 1,618 per share. This share is now trading at Rs 586, a discount of 63.8 per cent. Investors also lost in the high-profile IPO of Paytm. The company which offered its shares at Rs 2,150 is now quoting at Rs 833.9 on the exchanges. The market capitalisation of Paytm has crashed from the IPO valuation of Rs 1.5 lakh crore to Rs 54,057 crore as on February 18.

“The large size of Paytm’s IPO coupled with a complex business model and high valuation metrics dampened the performance post listing. Despite this, the IPO story of India races ahead and the IPOs which were launched after Paytm, such as Go Fashion and Tega Industries proved to be extremely successful,” said Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW Private Equity.

The year 2022 is expected to witness IPOs from LIC, Ola, Byju’s and Delhivery. India is home to 79 unicorns; 42 emerged in 2021 alone. “India is the third-largest startup hub in the world and has developed a strong ecosystem of entrepreneurs and venture capital investors, supported by favourable government policies, which will continue to feed into India’s accelerating IPO boom. The story has just begun, and the future looks quite bright,” Ralhan said.

An investment banker said the fate of the IPO market is linked to the strength of the stock market. If the stock market remains volatile and shows major correction, some of the issuers might postpone their IPO plans. On top of this, if issuers price their IPOs at high levels without leaving anything on the table for retail investors, there are bound to be some post-listing disasters.

With the US Federal Reserve planning to hike rates and tighten the monetary policy, foreign portfolio investors (FPIs) have started exiting from newly listed IPOs along with secondary markets.

Market regulator SEBI is also concerned about valuations. The IPO market price discovery is not as “transparent and efficient” as secondary market price discovery, SEBI Chairman Ajay Tyagi said while addressing a CII summit in September last year. In a consultation paper last week, SEBI said new age companies should make disclosures about their valuations based on issuance of new shares and acquisition of shares in the past 18 months before filing draft offer documents.

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Tags Bombay Stock Exchange (BSE), BSE Sensex, business news, current affairs, Domestic stock markets, indian express, Indian express business news, Indian express news, initial public offering, Markets news, stock markets

Delhi News

Explained: Who is eligible for the LIC IPO discount?

Post author By Z+ Insurance
Post date February 17, 2022
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NEW DELHI: The government-owned Life Insurance Corporation of India’s initial public offering (IPO) could be launched as early as next month. The initial public offering of over 31.6 crore shares or 5 per cent government stake would be the country’s biggest yet.
According to the LIC DRHP which was submitted to market regulator Sebi on Sunday, of the total shares offered via the IPO, up to 10% would be reserved for LIC policyholders. Further, policyholders and employees will receive a discount over the floor price, but the discount percentage is yet to be decided.
Portion reserved for retail investors:
LIC has reserved up to 35 per cent of its total IPO size for retail investors as per the draft papers, which means one could see the opening of several demat accounts as the government is expecting a lot of retail participation for the IPO.
Portion reserved for Staff, Policyholders
The draft prospectus specifies the portion reserved for employees will not exceed 5 per cent of post-offer equity share capital and may be offered at a discount. The portion reserved for policyholders will not exceed 10 per cent of the size and may also be offered at a discount. The intention behind the discounts is to encourage participation of the common man.
Portion Reserved for Anchor Investors, QIB, NII
The company will reserve 50 per cent of LIC IPO for For the Qualified Institutional Buyers (QIB). Qualified Institutional Buyers are those institutional investors who are generally perceived to possess expertise and the financial muscle to evaluate and invest in the capital market such as mutual funds, foreign institional investors, venture capital funds, provident funds etc. They have to be registered with Sebi.
The Non-Institutional Investors (NII) quota was fixed at 15 per cent. The institutions that want to subscribe for more than Rs 2 lakh are called non-institutional investors. The difference between a QII and an NII is that the latter does not have to register with SEBI.
About 60 per cent of qualified institutional bidders portion may be allocated to anchor investors on a discretionary basis. As per the filing, if there is under-subscription for the anchor investor portion, the remaining equity shares shall be added to the net QIB portion. Any QII, who makes an application of over Rs 10 crore, is an anchor investor. Such investors typically bring in other investors as well. Bidding for anchor investors will open one working day before the bid/ offer opening date and allocation for them will be completed within the anchor investor bid / offer period. One-third of the anchor investor portion will be reserved for domestic mutual funds.
Who qualifies for the discount?
All policies other than group policies qualify for Bidding in the Policyholder Reservation Portion. Only LIC policyholders are eligible to bid under the Policyholder Reservation Portion. However, one can apply as a RIB or Non-Institutional Bidder, but they cannot avail the discount. LIC boasts of nearly 29 crore policyholders.
Eligible policies?
All policies that have not exited LIC’s records by way of maturity, surrender or by way of death of the policyholder are eligible for policyholder reservation. Also, all policies other than group policies qualify for Bidding in the Policyholder Reservation Portion.
But, what if you have submitted proposal papers before the date of DRHP, but received policy later?
You will not be eligible then. LIC says the policy should have been issued on or before the date of the prospectus (13 February) and should not have exited by way of surrender, maturity or death claim on the bid or offer opening date.
How much is the discount?
The government is yet to decide that. Eligible Policyholder(s) are offered a discount of Rs Z per Equity Share. In case, the Offer Price (the price at which shares are allotted to retail and other investors) is Rs X, Eligible Policyholder(s) will be allotted Equity Shares at ₹(X-Z)per Equity Share. For example, if the issue price is Rs 2,000 and policyholders get a discount of 10%, then he will get the share at Rs 1800.
What is the maximum allocation to a policyholder?
As per the draft prospectus, the total value of allocation to an eligible policyholder cannot exceed Rs 2 lakh after discount. Such investors can bid under the ‘Policyholder Reservation Portion’ through the applications supported by blocked amount (ASBA) and the UPI mechanism.
However, eligible Policyholder(s) can also apply for Equity Shares under the RIB category or Non-Institutional Bidders category for an additional amount of upto Rs 200,000(net of Policyholder Discount)and more than Rs 200,000(net of Policyholder Discount),respectively.
Are joint life policy holders also eligible for the discount?
If you own a joint policy of LIC, then only one of the policy members can apply under the ‘Policyholder Reservation Portion’ category and avail the discount too. The PAN number of the applicant bidding in the offer (you or your spouse) needs to be updated while linking the PAN. Also, the policy member applying for the IPO has to have a demat account in his/ her name and in case the demat account is joint, the applicant needs to be the first /primary holder of the demat account.
Can NRIs avail the discount for policyholders?
While non-resident Indians (NRIs) are eligible to invest in IPOs in India, this category is not eligible under the ‘Policyholder Reservation Portion’. So, NRIs holding an LIC policy will have to apply under the retail category.
Who else is not eligible?
The spouse of an annuity policyholder (now deceased) who is currently receiving annuities is not eligible to apply for the LIC’s equity shares in the offer.
A nominee under a policy issued by the Corporation, is not eligible to Bid for the Equity Shares under his name. only the Eligible Policyholder(s) is eligible to Bid under the Policyholder Reservation Portion.
What benefits to employees get? LIC has extended reservations to its employees in the offer.
But if the employee also holds an LIC policy?
In this instance, an individual can apply under employee, policyholder and retail portions.
“Application made in the Policyholder Reservation Portion and Employee Reservation Portion category would be considered as valid Bids and not rejected. However, applications made in the Retail Portionand Non-Institutional Portion would be considered as multiple Bids and both the Bids will be rejected,” said LIC.

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Tags business news, ipo, Lic, LIC IPO, LIC IPO discount, LIC policyholders, RBI, UPI

Delhi News

LIC policyholders need to update PAN details by Feb 28 to participate in IPO

Post author By Z+ Insurance
Post date February 15, 2022
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On February 13, the state-run insurer filed draft papers with capital market regulator Sebi for sale of 5 per cent stake by the government for an estimated Rs 63,000 crore.

The initial public offering (IPO) of over 31.6 crore shares or 5 per cent government stake is likely to hit the market in March and employees and policyholders of the insurance behemoth would get a discount over the floor price.

“A policyholder of our Corporation shall ensure that his / her PAN details are updated in the policy records of our Corporation at the earliest.

“A policyholder who has not updated his / her PAN details with our Corporation before expiry of two weeks from the date of the filing of this DRHP with SEBI (i.e., by February 28, 2022) shall not be considered as an Eligible Policyholder,” as per the DRHP. The PAN updation can be done on LIC’s website either directly or with the help of agents.

It further said policyholders having one or more policies of LIC as on the date of the DRHP and bid / offer opening date and who are residents of India would be eligible to apply in this offer, under the Policyholder Reservation Portion.

The aggregate of reservation for eligible policyholders shall not exceed 10 per cent of the total offer size. The portion of the offer available for allocation to eligible policyholders on a proportionate basis is subject to the receipt of necessary approvals from the government.

LIC issued approximately 21 million individual policies in FY 2021, accounting for nearly 75 per cent of new individual policy issuances.

The IPO is offer for sale (OFS) by the Government of India. There is no fresh issue of shares by LIC. The government holds 100 per cent stake or over 632.49 crore shares in LIC. The face value of shares is Rs 10 apiece.

The LIC public issue would be the biggest IPO in the history of the Indian stock market. Once listed, LIC’s market valuation would be comparable to top companies like RIL and TCS.

The IPO of LIC is expected by March and the proceeds would be crucial to meet the revised disinvestment target of Rs 78,000 crore in the current fiscal.

LIC’s share capital was raised from Rs 100 crore to Rs 6,325 crore during September last year to help facilitate the IPO.

Last month, LIC reported a profit after tax of Rs 1,437 crore for the first half of the financial year 2021-22 as compared with Rs 6.14 crore in the year-ago period. Its new business premium growth rate stood at 554.1 per cent in the first half of 2021-22, compared with 394.76 per cent during the year-ago period.

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Tags #business, business news, capital market regulator, Draft Red Herring Prospectus, DRHP, government stake, initial public offering, ipo, Lic, life insurance corporation of india, pan, Permanent Account Number, policyholder, public issue, sebi

Delhi News

RBI, govt working together on crypto rules, talks on: Nirmala Sitharaman

Post author By Z+ Insurance
Post date February 14, 2022
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The government and the Reserve Bank of India (RBI) are “on board” with respect to the issue of cryptocurrency, even as discussions are going on the matter of digital virtual currencies, Finance Minister Nirmala Sitharaman said at a press conference on Monday.

She was speaking after having addressed the Central Board of Directors of the RBI in its customary post-budget meeting.

Sitharaman also said that there was a “lot of positivity” around the upcoming initial public offer (IPO) of Life Insurance Corporation. With the government planning to sell its 5 per cent equity, the LIC IPO is expected to the biggest in the Indian capital market. “A big decision like this is never a knee-jerk reaction. It is done with consciousness… And I can see after the announcement, the reception, there is a buzz in the air,” Sitharaman said.

LIC filed its draft red herring prospectus (DRHP) with the markets’ regulator on Sunday.

On the issue of taxation and regulation of cryptocurrencies, she said, “RBI, government are onboard, discussions are going on. Whatever decisions government or RBI takes, will be taken after discussions. We are all discussing prior to the Budget, discussion continues and we shall continue to have discussions. All the decisions which have been taken on it, obviously it has a very serious, it is a digital currency from the central bank of some description, so obviously with more focus having had consultations.”

Reiterating the central bank’s serious concerns over cryptocurrencies, RBI Governor Shaktikanta Das had last Thursday said these are a big threat to the country’s financial and macroeconomic stability. He had also warned investors that cryptocurrencies do not have any underlying asset, not even a tulip.

The Union Budget 2022-23 has proposed a 30 per cent tax on private cryptocurrencies and non-fungible tokens.

To another query on whether the plan to include government securities in international bond indices is being held back, Das on Monday said the work and process is underway with regard to this proposal. “Inclusion in the global index is a process and earlier fully accessible route was introduced whereby certain G-sec, it is fully accessible to the foreign investors. We are moving towards that it is work in progress so far as inclusion in index is concerned,” he said.

Das said the issuance of green bonds, another proposal for the next year’s Budget, will widen participation of investors in the Indian market. “With regard to green bond…cash and debt management group will meet next month and they will plan for it. The main rationale behind going for green bond is that world over there are lot of investors who have dedicated funds to invest in green bonds. So basically when you float a green bond which has a specified and dedicated purpose, when you float a green bond you are basically widening the participation of international investors in the domestic bond market…,” he said.

Meanwhile, responding to a query on whether the CBI has been slow in taking action in ABG Shipyard case, Sitharaman said bankers actually took “lesser than what is normally an average time to detect these kinds of frauds.” The CBI Saturday said it has booked ABG Shipyard Ltd (ABGSL) and its directors for fraudulent loan default to the tune of Rs 22,842 crore.

“This is actually an account which became an NPA in November 2013. After that, because it is a consortium of banks who had a business with them, they had all sat together to see how best restructuring can be done, which is due process done for any account under stress more so it is a big account and also becoming a NPA. So that initiative was taken by the consortium, SBI had been the lead, ICICI Bank is another big bank, all of them sat together and started working on it. So 2014 onwards this process was going on,” she said.

“For any account details and the element of fraud or element of any kind of major letting down of banks almost takes 52-54 months to be fully with all the intensive work that should happen and therefore when you are coming in this particular case with that kind of measurement actually I should say to the credit of the banks they have taken lesser than what is normally an average time to detect these kinds of frauds,” the finance minister added.

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